Question: Presented below are two independent situations:
(1) Riley Company exchanged an old machine (cost $75,000 less $45,000 accumulated depreciation) plus $5,000 cash for a new similar type machine. The old machine had a fair market value of $27,000. Prepare the entry to record the exchange of similar assets by Riley Company.
(2) Denton Company trades old equipment (cost $60,000 less $36,000 accumulated depreciation) for new equipment. Denton paid $24,000 cash in the trade. The old equipment that was traded had a fair market value of $36,000.
Required: Prepare the entry to record the exchange of assets by Denton Company.