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:

Inferential Statistics

A branch of statistics that allows one to make predictions or inferences about a population based on a sample of data drawn from that population.

Statistics

The branch of mathematics dealing with data collection, analysis, interpretation, and presentation.

Correlated

A statistical relationship indicating that two variables move in relation to each other, either positively or negatively.

Relationship

How two or more entities, things, or persons relate to each other, or their state of linkage.