Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. $$\begin{array} { l c c c }
& { \text { Old Equipment } } && \text { Cash } \
& \text { Book Value } & \text { Fair Value } & \text { Received } \
\text { Equipment A } & \$ 75,000 & \$ 80,000 & \$ 12,000 \
\text { Equipment B } & \$ 60,000 & \$ 56,000 & \$ 10,000
\end{array}$$
- For Equipment A, Pensacola would record the new equipment at:

Question

Pensacola Inc. exchanged old equipment for new equipment in two exchange transactions. Each transaction has commercial substance. $$\begin{array} { l c c c } 
& { \text { Old Equipment } } && \text { Cash } \
& \text { Book Value } & \text { Fair Value } & \text { Received } \
\text { Equipment A } & \$ 75,000 & \$ 80,000 & \$ 12,000 \
\text { Equipment B } & \$ 60,000 & \$ 56,000 & \$ 10,000
\end{array}$$
- For Equipment A, Pensacola would record the new equipment at:

Quizplus · Accepted Answer

$$\begin{array} { | l | r | r| } 
\hline \text { Equipment-rew } ( \$ 80,000 - 12,000 ) & 68,000 \
\hline \text { Cash } & 12,000 & \
\hline \text { Equipment-old (book value) } & & 75,000 \
\hline \text { Gain} & & 5,000 \
\hline
\end{array}$$

Pensacola Inc - for Equipment A, Pensacola Would Record the New Equipment