Question

On March 1, 2018, GHI Company exchanged productive assets with WXY, Inc. as follows:

	Asset A Owned by GHI	Asset B Owned by WXY
Historical Cost	96,000	110,000
Accumulated Depreciation (a)	40,000	47,000
Fair value at date of exchange	60,000	75,000
Cash paid by GHI	15,000
Cash paid by WXY		15,000
(a) recognized to the date of the exchange

       

Assume that the exchange has commercial substance.

A. Using the attached T-account template, prepare the entry to recognize the exchange in the general ledger of GHI Company.

B. Using the attached T-account template, prepare the entry to recognize the exchange in the general ledger of WXY, Inc.

Assume the exchange lacks commercial substance.

C. Using the attached T-account template, prepare the entry to recognize the exchange in the general ledger of GHI Company.

D. Using the attached T-account template, prepare the entry to recognize the exchange in the general ledger of WXY, Inc.

Answer 1