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Delmon Co. and Tylos Co. have an exchange with no commerical substance. The asset given...

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Accounting

Delmon Co. and Tylos Co. have an exchange with no commerical substance. The asset given up by Devlom has a book value of BD 120,000 and a fair value of BD 135,000. The asset given up by Tylos has a book value of BD 220,000 and a fair value of BD 200,000. Cash of BD 65,000 is received by Tylos.

The journal entry made by Tylos to record the exchange wiill include:

A. A credit to Equipment for BD 200,000

B. A debit to Loss on Exchange for BD 20,000

C. A credit to Gain on Exchange for BD 20,000

D. A credit to Cash for BD 65,000

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