Prepare the journal entries to record the exchange

Reference no: EM13126314

Holyfield Corporation wishes to exchange a machine used in its operations. Holyfield has received the following offers from other companies in the industry.

1. Dorsett Company offered to exchange a similar machine plus $23,000. (The exchange has commercial substance for both parties.)

2. Winston Company offered to exchange a similar machine. (The exchange lacks commercial substance for both parties.)

3. Liston Company offered to exchange a similar machine, but wanted $3,000 in addition to Holyfield's machine. (The exchange has commercial substance for both parties.)

In addition, Holyfield contacted Greeley Corporation, a dealer in machines. To obtain a new machine, Holyfield must pay $93,000 in addition to trading in its old machine.

Holyfield Dorsett Winston Liston Greeley
Machine cost 160000 120,000 152000 160000 130000
Accum. Depr 60,000 45,000 71000 75000 0
Fair Value 92000 69000 92000 95000 185000

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company.

Reference no: EM13126314

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