Answer:
A: we reocrd at cost, which is the discounted price:
40,000 x (1 - 2%) = 39,200
Equipment 39,200 debit
           Cash               39,200 credit
B: we discount the note implicit interest:
42,000 / 1.12 = 37,500
Equipment    37,500 debit
     Note payables          37,500 credit
C: Because; there is commercial substance we recognize the loss on the old equipment as the book value is 13,500 while it is being traded at 8,500
We write off, post the cash used and the loss. The new equipment enter the accounting for the difference to blaance the entry:
equipment           45,500 debit
acc depreciation 15,500 debit
loss at disposal    5,000 debit
                  cash         37,000 credit
                  equipment 29,000 credit
D:  we evaluate the equipment at fair value
Equipment      40,000 debit
   common stock              2,500            credit
   additional paid-in         37,500           credit
We now it is no-par therefore there is an additional paid in.
<em>As we aren't provide with the face value we assume is 1 dollar.</em>
Explanation: