Question

Question 5 View Policies Current Attempt in Progress Grouper Company exchanged equipment used in its manufacturing operations plus $3.120 in cash for similar equipment used in the operations of Monty Company. The following information pertains to the exchange Grouper Co. Monty Co. Equipment (cost) $29,120 Accumulated depreciation $29,120 19,760 13,000 3,120 10,400 16,120 Fair value of equipment Cash given up 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 for the amounts.) Account Titles and Explanation Debit Credit Grouper Company: Monty Company:

Answer 1

Grouper Company Requirement a Debit in $ Credit in $ Journal Enteries Date Particulars Grouper Co. Equipment (new) a/c Accumulated depreciation a/c To Cash To Equipment (Old) Dr. Dr. 12480 19760 3120 29120 Dr. Monty Co. Equipment (new) a/c Accumulated depreciation a/c Loss in Exchange a/c Cash a/c To Equipment (Old) 13000 10400 2600 3120 29120 Requirement b Debit in $ Credit in $ Dr. Journal Enteries Date Particulars Grouper Co. Equipment (new) a/c Accumulated depreciation a/c To Gain on Exchange To Cash To Equipment (Old) 16120 19760 Dr. 3640 3120 29120 Dr. Monty Co. Equipment (new) a/c Accumulated depreciation a/c Loss in Exchange a/c Cash a/c To Equipment (Old) Dr. 13000 10400 2600 3120 Dr. 29120