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Titleist Inc. exchanges its used golf club casting equipment with Callaway Inc. in exchange for...

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Accounting

Titleist Inc. exchanges its used golf club casting equipment with Callaway Inc. in exchange for a newer piece of casting machinery. The book value of Titleists used machine is $75,000 (original cost of $100,000 and accumulated depreciation of $25,000). Titleist also receives $5,000 in the exchange. This exchange is deemed to lack commercial substance. If the fair market value of Titleists machine is $80,000, and the fair market value of Callaways machine is $75,000, how would Titleist account for this transaction?

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