Water Drops,Inc.purchased equipment for $200,000.The company recorded total depreciation of $140,000.On January 1,2017,the company exchanges the equipment for new equipment,paying $150,000 cash.The fair market value of the new equipment is $250,000.Prepare the journal entry to record this transaction.Assume the exchange has commercial substance.

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The Answer of Water Drops,Inc.purchased equipment for $200,000.The company recorded total depreciation of $140,000.On January 1,2017,the company exchanges the equipment for new equipment,paying $150,000 cash.The fair market value of the new equipment is $250,000.Prepare the journal entry to record this transaction.Assume the exchange has commercial substance.