leadland Ltd. exchanged equipment used in its manufacturing operations for equipment used in the operations of Sage Ltd. The Following information pertains to the exchange: Equipment (cost) Accumulated depreciation Fair value of old equipment Cash given up Headland Ltd. $84,500 46,800 42,000 1,000 Sage Ltd. $84,500 40,300 43,000 Both companies agreed that the exchange had commercial substance for both companies. Prepare the necessary journal entries to record the asset exchange on the books of both companies. (Credit account titles are automatically indented when the 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. List all debit entries before credit entries)
leadland Ltd. exchanged equipment used in its manufacturing operations for equipment used in the operations of Sage Ltd. The Following information pertains to the exchange: Equipment (cost) Accumulated depreciation Fair value of old equipment Cash given up Headland Ltd. $84,500 46,800 42,000 1,000 Sage Ltd. $84,500 40,300 43,000 Both companies agreed that the exchange had commercial substance for both companies. Prepare the necessary journal entries to record the asset exchange on the books of both companies. (Credit account titles are automatically indented when the 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. List all debit entries before credit entries)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Headland Ltd. exchanged equipment used in its manufacturing operations for equipment used in the operations of Sage Ltd. The
following information pertains to the exchange:
Equipment (cost)
Accumulated depreciation
Fair value of old equipment
Cash given up
Headland Ltd.
$84,500
46,800
42,000
Account Titles
Headland Ltd.:
1,000
Sage Ltd.
$84,500
40,300
43,000
Both companies agreed that the exchange had commercial substance for both companies. Prepare the necessary journal entries to
record the asset exchange on the books of both companies. (Credit account titles are automatically indented when the 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. List all debit entries
before credit entries.)
Debit
Credit
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