Cheyenne Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Ayayai Company. The following information pertains to the exchange. Cheyenne Ayayai Co. Co. Equipment (cost) $42,000 $42,000 Accumulated depreciation 28,500 15,000 Fair value of equipment 18,750 23,250 Cash given up 4,500 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Cheyenne Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Ayayai Company. The following information pertains to the exchange. Cheyenne Ayayai Co. Co. Equipment (cost) $42,000 $42,000 Accumulated depreciation 28,500 15,000 Fair value of equipment 18,750 23,250 Cash given up 4,500 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Cheyenne Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in
the operations of Ayayai Company. The following information pertains to the exchange.
Cheyenne
Ayayai Co.
Co.
Equipment (cost)
$42,000
$42,000
Accumulated depreciation
28,500
15,000
Fair value of equipment
18,750
23,250
Cash given up
4,500
Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks
commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts.)
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