Answer
An exchange of commercial substance applies to a business transaction where the exchange of a purchase consideration and value of product or service received (in this case equipment) shall reflect into a company's cash flow. The value of the given is put up against the value of what was given e.g., purchase of food. On the other hand, an exchange that doesn't have any monetary and nonmonetary value is termed to be transaction without commercial substance. For example, sale and lease back between a business owner and the business.
Work Step by Step
As summarized above.