Carlos Arruza Co. Tony LoBianco Co. (a) Prepare the journal entries to record th

Question

Carlos Arruza Co.

Tony LoBianco Co.

(a)

Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance.

Carlos Arruza Company exchanged equipment used in its manufacturing operations plus $9,795 in cash for similar equipment used in the operations of Tony LoBianco Company. The following information pertains to the exchange.

Carlos Arruza Co.

Tony LoBianco Co.

Equipment (cost) $91,420 $91,420 Accumulated depreciation 62,035 32,650 Fair value of equipment 40,813 50,608 Cash given up 9,795

Explanation / Answer

Carlos Arruza Co. Tony LoBianco Co. (a) Prepare the journal entries to record th

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