Everything with in a red box is incorrect, I am having trouble with .docx - Everything with in a red box is incorrect I am having trouble with those

Everything with in a red box is incorrect, I am having trouble with .docx

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Everything with in a red box is incorrect, I am having trouble with those specifically. HINTS: On Asset 3 the key is use today's "outright purchase price" as the amount to debit Machinery for to set up the JE. The difference between today's cash downpayment + Note and the value is the "discount on note" that you would debit. Meanwhile you credit cash for the amount of the downpayment and credit notes payable for the amount of the note. By giving you the PV (today's purchase price) you don't have to try to figure it out on your calculator. On Asset 4 is a difficult one. The exchange lacked commercial substance and cash was received so if there is a gain you have to recognize part of the gain. The rest of the gain will be folded into the cost of the new machine in the journal entry. The percentage of the gain is based on (cash/ cash + Fair value of machine acquired). Take that percentage and multiply it by the gain to get the portion to be recorded. The rest of the gain is subtracted from the fair value of the machinery acquired.
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