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Nonmonetary Exchanges with Boot

8. (Nonmonetary Exchanges with Boot) Susquehanna Corporation wishes to exchange
a machine used in its operations. Susquehanna has received the following offers from
other companies in the industry.
1. Choctaw Company offered to exchange a similar machine plus $23,000.
2. Powhatan Company offered to exchange a similar machine.
3. Shawnee Company offered to exchange a similar machine, but wanted $8,000 in
addition to Susquehanna's machine.
In addition, Susquehanna contacted Seminole Corporation, a dealer in machines. To
obtain a new machine, Susquehanna must pay $93,000 in addition to trading in its old
Susquehanna Choctaw Powhatan Shawnee Seminole
Machine cost $160,000 $120,000 $147,000 $160,000 $130,000
Accumulated 50,000 45,000 71,000 75,000 -0-
Fair value 92,000 69,000 92,000 100,000 185,000
For each of the four independent situations, prepare the journal entries to record the
exchange on the books of each company. (Round to nearest dollar.)

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Solution Summary

The solution explains Nonmonetary Exchanges with Boot using the example of Susquehanna Corporation