The Following Transactions Occurred in Fiscal 2018

question 25

Essay

The following transactions occurred in fiscal 2018:
• Synthesize Inc.exchanged machinery with Energize Corp.

• Synthesize Inc.purchased equipment by signing a 5 year non-interest bearing note payable for $200,000.The implicit rate of interest was 5%.
• Synthesize received a government grant of $10,000 to help purchase the equipment.
Required:
a)Assuming the machinery exchange has commercial substance,prepare the required journal entries for the exchange for both Synthesize and Energize.
b)Assuming the machinery exchange does not have commercial substance,prepare the required journal entries for the exchange for both Synthesize and Energize.
c)Prepare the required journal entry to record the purchase of the equipment purchased by the non-interest bearing note.
d)Prepare the required journal entries to record the government grant using both the gross method and the net method.

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Definitions:

Organizational Ethics

The principles and standards that guide behavior and decision-making processes within an organization, shaping its culture and reputation.

Ethical Compliance Programs

Implemented frameworks within organizations designed to ensure activities and practices comply with ethical standards, laws, and regulations.

Federal Sentencing Guidelines

A set of regulations that determine the punishment for individuals and organizations convicted of federal crimes, encouraging ethical behavior through penalties.

Consumer Misconduct

Any behavior by consumers that is unethical or illegal, including fraud and deceit in the marketplace.