The Following Transactions Occurred in Fiscal 2021:
•Synthesize Inc •Synthesize Inc

question 72

Essay

The following transactions occurred in fiscal 2021:
•Synthesize Inc. exchanged machinery with Energize Corp.
$$\begin{array} { | l | r | r | } \hline & \text { Synthesize's machinery } & \text { Energize's machinery } \\\hline \text { Cost } & 500,000 & 620,000 \\\hline \text { Accumulated depreciation } & 200,000 & 500,000 \\\hline \text { Fair value } & 350,000 & \text { Not known } \\\hline\end{array}$$ •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:

Close Relationships

Bonds between people characterized by feelings of affection, support, and deep connection.

Small Classes

Educational settings with a low student-to-teacher ratio, believed to enhance personalized learning and academic performance.

Financial Circumstances

An individual's or entity's current financial situation, including income, assets, debts, and expenses.

Social Connections

The relationships an individual has with others, including friends, family, coworkers, and other social networks, which can influence one's health and well-being.