?Sarah Company is exchanging a special machine for a similar machine from Wilhelm, Inc. Sarah's equipment originally cost $300,000 and has accumulated depreciation of $125,000. Wilhelm's machine cost $250,000 and has a book value of $150,000. No cash will be exchanged because the fair value of both machines is $160,000. Each company expects their cash flows will increase after the exchange.
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Required:
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Prepare the journal entry for each company.
What will be an ideal response?
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| Sarah Company | ? | ? | |
| Machine | 160,000 | ? | |
| Accumulated DepreciationLoss on Exchange | 125,00015,000 | ? | |
| ? | Equipment | ? | 300,000 |
| Wilhelm, Inc. | ? | ? | |
| Machine | 160,000 | ? | |
| Accumulated Depreciation | 100,000 | ? | |
| ? | MachineGain on Exchange | ? | 250,00010,000 |
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