Equipment that cost $416,500 and has accumulated depreciation of $315,100 is exchanged for equipment with a fair value of $200,000 and $40,000 cash is received. The exchange lacked commercial substance.
Calculate the gain to be recognized from the exchange.
Prepare the entry for the exchange. Show a check of the amount
recorded for the new equipment. (Credit account titles
are automatically indented when the amount is entered. Do not
Account Titles and Explanation
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