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Prepare the journal entries to record the exchange on books

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Question - ABC Company exchanged equipment used in its manufacturing operations plus €6,000 in cash for similar equipment used in the operations of XYZ Company. The following information pertains to the exchange.

 

ABC Co.

XYZ Co.

Equipment (cost)

€84,000

€84,000

Accumulated depreciation

57,000

30,000

Fair value of equipment

40,500

46,500

Cash given up

6,000

 

Instructions - Prepare the journal entries to record the exchange on the books of both companies. Assume that exchange has commercial substance.

Reference no: EM132544399

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