Question

On September 3, 2021, the Robers Company exchanged equipment with Phifer Corporation. The facts of the exchange are as follows:

	Robers’ Asset			Phifer’s Asset
Original cost	$	210,000		$	230,000
Accumulated depreciation		127,000			135,000
Fair value		102,000			79,000

To equalize the exchange, Phifer paid Robers $23,000 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.)

Answer 1

	Account Titles and Explanation	Debit	Credit
Robers entries	Equipment (new)	$79,000
	Accumulated Depreciation	127000
	Cash	23000
	Equipment		$210000
	Gain on Sale		19000
Phifer's entries	Equipment(new)	$102000
	Accumulated depreciation	135000
	Loss on Sale	16000
	Equipment		$230000
	Cash		23000