Solution-Prepare the journal entries to record the exchange

Prepare the journal entries to record the exchange

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Reference no: EM132490365

Question - Nash Corporation wishes to exchange a machine used in its operations. Nash has received the following offers from other companies in the industry.

1. Crane Company offered to exchange a similar machine plus $29,900. (The exchange has commercial substance for both parties.)

2. Cheyenne Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)

3. Ayayai Company offered to exchange a similar machine, but wanted $3,900 in addition to Nash's machine. (The exchange has commercial substance for both parties.)

In addition, Nash contacted Pina Corporation, a dealer in machines. To obtain a new machine, Nash must pay $120,900 in addition to trading in its old machine.

	Nash	Crane	Cheyenne	Ayayai	Pina
Machine cost	$208,000	$156,000	$197,600	$208,000	$169,000
Accumulated depreciation	78,000	58,500	92,300	97,500	-0-
Fair value	119,600	89,700	119,600	123,500	240,500

Required - For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.

Reference no: EM132490365

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Prepare the journal entries to record the exchange

Reference no: EM132490365

Reference no: EM132490365

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