Sarah Company is exchanging a unique machine for a similar machine from Wilhelm, Inc. Sarah's equipment originally cost $300,000 and has a book value of $175,000. Wilhelm's machine cost $250,000 and has a book value of $150,000. No cash will be exchanged, and the two machines will continue to perform the same functions for each company.
Required:
Prepare the journal entry for each company.

Question

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The Answer of Sarah Company is exchanging a unique machine for a similar machine from Wilhelm, Inc. Sarah's equipment originally cost $300,000 and has a book value of $175,000. Wilhelm's machine cost $250,000 and has a book value of $150,000. No cash will be exchanged, and the two machines will continue to perform the same functions for each company.
Required:
Prepare the journal entry for each company.

Sarah Company Is Exchanging a Unique Machine for a Similar