Nonmonetary exchange Athens Inc.exchanged machinery with an appraised value of $1,170,000, a recorded cost of $1,800,000 and accumulated depreciation of $900,000, for machinery that Sparta Corp.owns. Sparta's machinery has an appraised value of $1,140,000, a recorded cost of $2,160,000, and accumulated depreciation of $1,188,000.Sparta also gave Athens $30,000 in the exchange. Assume depreciation has been updated to the date of exchange. Instructions
a)Prepare the entries on both companies' books assuming that the transaction has
commercial substance.
b)Prepare the entries on both companies' books assuming that the transaction lacks
commercial substance.

Question

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The Answer of Nonmonetary exchange Athens Inc.exchanged machinery with an appraised value of $1,170,000, a recorded cost of $1,800,000 and accumulated depreciation of $900,000, for machinery that Sparta Corp.owns. Sparta's machinery has an appraised value of $1,140,000, a recorded cost of $2,160,000, and accumulated depreciation of $1,188,000.Sparta also gave Athens $30,000 in the exchange. Assume depreciation has been updated to the date of exchange. Instructions
a)Prepare the entries on both companies' books assuming that the transaction has
commercial substance.
b)Prepare the entries on both companies' books assuming that the transaction lacks
commercial substance.

Nonmonetary Exchange Athens Inc