Sweet Company exchanged equipment used in its manufacturing operations plus $3,2

Question

Sweet Company exchanged equipment used in its manufacturing operations plus $3,240 in cash for similar equipment used in the operations of Pharoah Company. The following information pertains to the exchange Equipment (cost) Accumulated depreciation Fair value of equipment Cash given up Sweet Co $30,240 20,520 13,500 3,240 Pharoah Co. $30,240 10,800 16,740 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 0 for the amounts.) Account Titles and Explanation Debit Credit ompan Equipment Equipment

Explanation / Answer

Journal

Sweet Company

Pharoah Company

Account Name Debit Credit Equipment ($9720 + $3240) $12960 Accumulated depreciation 20520 Equipment 30240 Cash 3240

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