Question 5
20 pts
Piper Corp exchanged equipment used in its manufacturing operations plus $18,000 in cash for
similar equipment used in the operations of Simon Corp. The following table presents data
pertinent to the transaction:
Piper Corp. Simon Corp.
Equipment (cost)
$60,000
$90,000
Accumulated Depreciation $35,000
$45,000
Fair value of equipment $32,000
$50,000
Cash given up
$18,000
Assume that the exchange lacks commercial substance. Using the order of the accounts covered
in the lecture slides 10-45 through 10-49, the journal entry prepared by Piper Corp. includes a
debit to
for
a credit to
for
, a debit to
for
and a credit to
for
a credit to
for
