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Waterway Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Wildhorse Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Waterway Co. $42,000 28,500 18,750 4,500 Wildhorse Co. $42,000 15,000 23,250 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.) Account Titles and Explanation Waterway Company: Debit Credit

Waterway Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Wildhorse Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Waterway Co. $42,000 28,500 18,750 4,500 Wildhorse Co. $42,000 15,000 23,250 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.) Account Titles and Explanation Waterway Company: Debit Credit

FINANCIAL ACCOUNTING
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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Do has commercial and lacks commercial substance please using the same template as first pic
Waterway Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Wildhorse Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Waterway Co. $42,000 28,500 18,750 4,500 Wildhorse Company: Account Titles and Explanation Waterway Company: Wildhorse Co. $42,000 15,000 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.) 23,250 Debit Credit III
Transcribed Image Text:Waterway Company exchanged equipment used in its manufacturing operations plus $4,500 in cash for similar equipment used in the operations of Wildhorse Company. The following information pertains to the exchange. Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Waterway Co. $42,000 28,500 18,750 4,500 Wildhorse Company: Account Titles and Explanation Waterway Company: Wildhorse Co. $42,000 15,000 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.) 23,250 Debit Credit III
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.) Account Titles and Explanation Waterway Company: Wildhorse Company: Debit Credit
Transcribed Image Text: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.) Account Titles and Explanation Waterway Company: Wildhorse Company: Debit Credit
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