On October 1, 2023, Swifty Horses exchanged an old piece of equipment and cash for a new piece of equipment. The relevant details of the transaction are:
Value of old equipment given up
Equipment (cost): $95,000
Accumulated depreciation: $64,000
Fair value of old equipment given up: $26,000
Cash given up: $3,500
Required:
Prepare the journal entry for Swifty Horses to record the exchange, assuming the following:
The transaction has commercial substance.
The transaction lacks commercial substance.