Crane Limited exchanged equipment that it uses in its manufacturing operations for similar equipment that...
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Crane Limited exchanged equipment that it uses in its manufacturing operations for similar equipment that is used in the operations of Blue Limited. Crane also paid Blue $2,700 in cash. The following information pertains to the exchange.
| Crane | Blue | |||||
|---|---|---|---|---|---|---|
| Equipment (cost) | $59,000 | $64,000 | ||||
| Accumulated depreciation | 30,750 | 21,000 | ||||
| Fair value of equipment | 30,000 | 32,700 | ||||
Prepare the journal entries to record the exchange on the books of both companies, assuming the exchange is determined not to have commercial substance
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