Sarah Company is exchanging a special machine for a similar machine from Wilhelm, Inc. Sarahs...
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Sarah Company is exchanging a special machine for a similar machine from Wilhelm, Inc. Sarahs equipment originally cost $300,000 and has accumulated depreciation of $125,000. Wilhelm's machine cost $250,000 and has a book value of $150,000. No cash will be exchanged because the fair value of both machines is $160,000. Explain the journal entry for each company (Sarah and Wilhelm) assuming commercial substance.
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