Aylmer Inc. exchanged equipment used in its business for similar equipment used by Belmont Inc. Belmont paid Aylmer $4,000 cash as part of the deal. The following information relates to the assets of the two companies at the time of the exchange. Aylmer Inc. $61,000 Belmont Inc. Equipment (cost) Accumulated Depreciation Fair value of the equipment $44,000 $23,000 $71,000 $58,000 $19,000 Instructions: | a) Prepare the journal entry for Aylmer Inc. To record the transaction if the exchange is deemed to have commercial substance. Date Description Dr Cr b) Prepare the journal entry for Belmont Inc. to record the transaction if the exchange is deemed to have NO commercial substance. Date Description Dr Cr
Aylmer Inc. exchanged equipment used in its business for similar equipment used by Belmont Inc. Belmont paid Aylmer $4,000 cash as part of the deal. The following information relates to the assets of the two companies at the time of the exchange. Aylmer Inc. $61,000 Belmont Inc. Equipment (cost) Accumulated Depreciation Fair value of the equipment $44,000 $23,000 $71,000 $58,000 $19,000 Instructions: | a) Prepare the journal entry for Aylmer Inc. To record the transaction if the exchange is deemed to have commercial substance. Date Description Dr Cr b) Prepare the journal entry for Belmont Inc. to record the transaction if the exchange is deemed to have NO commercial substance. Date Description Dr Cr
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please include all the calculations for my reference. Thanks
Transcribed Image Text:Aylmer Inc. exchanged equipment used in its business for similar equipment used by Belmont Inc.
Belmont paid Aylmer $4,000 cash as part of the deal.
|The following information relates to the assets of the two companies at the time of the exchange.
Aylmer Inc.
$61,000
$44,000
$23,000
Belmont Inc.
Equipment (cost)
Accumulated Depreciation
$71,000
$58,000
$19,000
Fair value of the equipment
Instructions:
a) Prepare the journal entry for Aylmer Inc. To record the transaction if the exchange is deemed to have commercial substance.
Date
Description
Dr
Cr
b) Prepare the journal entry for Belmont Inc. to record the transaction if the exchange is deemed to have NO commercial substance.
Date
Description
Dr
Cr
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