Krasel Corporation exchanges old equipment for new equipment. The original cost of the old equipment was $90,000, and its accumulated depreciation at the date of exchange was $70,000. The new asset received had a fair value of $50,000 and a book value of $45,000. The journal entry to record this exchange will include which of the following entries? 1. Debit equipment $50,000
Credit gain on exchange of asset $30,000
2. Credit equipment $90,000
Debit accumulated depreciation $70,000