Martinez Company exchanged equipment used in its manufacturing operations plus $3,360 in cash for similar equipment used in the operations of Sandhill Company. The following information pertains to the exchange. Martinez Co. Sandhill Co.Equipment (cost)$31,360 $31,360Accumulated depreciation21,280 11,200Fair value of equipment14,000 17,360Cash given up3,360 Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has 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 0 for the amounts.)

An exchange of assets with cash consideration is often used in business deals and mergers and…

Answered: Martinez Company exchanged equipment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Martinez Company exchanged equipment used in its manufacturing operations plus $3,360 in cash for similar equipment used in the operations of Sandhill Company. The following information pertains to the exchange.

	Martinez Co.	Sandhill Co.
Equipment (cost)	$31,360	$31,360
Accumulated depreciation	21,280	11,200
Fair value of equipment	14,000	17,360
Cash given up	3,360

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has 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 0 for the amounts.)

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