On September 3, 2018, the Robers Company exchanged equipment with Phifer Corpora

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 $ 140,000 $ 160,000 Accumulated depreciation 71,000 79,000 Fair value 81,000 72,000 To equalize the exchange, Phifer paid Robers $9,000 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.)

Explanation / Answer

1 Cash 9000 Equipment—new 72000 Accumulated depreciation—old asset 71000        Equipment—old 140000       Gain on exchange of assets 12000 2 Equipment—new 81000 Accumulated depreciation—old asset 79000 Loss on exchange of assets 9000       Cash 9000        Equipment—old 160000

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