Reference no: EM132743936
Question: The following transactions occurred in fiscal 2021: Transaction 1:
Synthesize Inc. exchanged machinery with Energize Corp. Synthesize's machinery Energize's machinery Cost 500,000 620,000 Accumulated depreciation 200,000 500,000 Fair value 350,000 Not known Transaction 2: Synthesize Inc. purchased equipment by signing a 5 year non-interest bearing note payable for $200,000. The implicit rate of interest was 5%. Transaction 3: Synthesize received a government grant of $10,000 to help purchase the equipment.
Required: a) Assuming the machinery exchange has commercial substance, prepare the required journal entries for the exchange for Energize.
b) Assuming the machinery exchange does NOT have commercial substance, prepare the required journal entries for the exchange for Synthesize.
c) Prepare the required journal entry to record the purchase of the equipment purchased by the noninterest bearing note.
d) Prepare the required journal entries to record the government grant using both the gross method and the net method.
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