Exchange of Used asset and commercial substance: Sometimes an asset can be acquired in exchange of an existing used asset. The used asset would be exchanged at a price which may be more or less than the cost of the new asset. Any deficit resulting from the exchange is paid in cash. This exchange may result in a gain or loss on the disposal of the old asset, which should be recorded as part of the transaction. When the exchange is for nonmonetary assets, fair value is the basis of measurement. If the future
(a)
To record: To record the exchange for both H and W in accordance with generally accepted accounting principles.
(b)
To determine whether the exchange of Assets A and B lacks commercial substance.

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Chapter 10 Solutions
INTERMEDIATE ACCOUNTING WPNG MULTI-S
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