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ABC Company had a deal with ZY X company to exchange the old machine with...

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Question

Accounting

ABC Company had a deal with ZY X company to exchange the old machine with new machine as follows:

- The recording showed that the cost of the old machine was 60,000 and the accumulated depreciation after 2 years $20,000

- The company must pay $14,000 with the old machine

- The fair value of the new machine is $70,000

Instruction:

Record the necessary entry for the exchange transaction and determine the amount of gain or loss that would be recognized from this exchange of assets.

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