Question

On September 3, 2018, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows:

	Robers’ Asset			Phifer’s Asset
Original cost	$	155,000		$	175,000
Accumulated depreciation		83,000			91,000
Fair value		85,500			73,500

To equalize the exchange, Phifer paid Robers $12,000 in cash.

Required:
Record the exchange for both Robers and Phifer. The exchange has commercial substance for both companies. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the exchange of equipment for Robers Company. The exchange has commercial substance for both companies. To equalize the exchange, Phifer paid Robers $12,000 in cash.

Note: Enter debits before credits.

	Event General Journal Debit Credit 1

Journal entry worksheet

• Record the exchange of equipment for Phifer Corporation. The exchange has commercial substance for both companies. To equalize the exchange, Phifer paid Robers $12,000 in cash.

Note: Enter debits before credits.

	Event General Journal Debit Credit 2

Answer 1

Journal entry in the books of Robers books
Particulars	Debit	Credit
Cash	$12,000
New equipment	$73,500
Accumulated depreciation	$83,000
Old equipment		$155,000
Gain on exchange of assets		$13,500
(To record the exchange on the books of Robers books)
Journal entry in the books of Phifer books
New equipment	$85,500
Accumulated depreciation	$91,000
Loss	$10,500
Cash		$12,000
Old equipment		$175,000
(To record the exchange on the books of Phifer books)