Question

Problem 10-6 Nonmonetary exchange (L010-6] Southern Company owns a building that it leases to others. The building's fair value is $1550,000 and its book value is $920.000 (original cost of $250.000 less accumulated depreciation of $1230,000). Southern exchanges this for a building owned by the Eastern Company. The building's book value on Eastern's books is $1.070,000 foriginal cost of $1,750,000 less accumulated depreciation of S680000) Eastern also gives Southern $155,000 to complete the exchange. The exchange has commercial substance for both companies Required: Prepare the journal entries to record the exchange on the books of both Southern and Eastem transaction/event, select "No journal entry required in the first account field.) if no entry is required for a View transaction list Journal entry worksheet Record the exchange of building for Southern Company. The exchange has commercial substance for both companies Notel Enter de bord Event General Journal Debit edit Record Clear entry View general journal

Answer 1

Answer
Southern:	Debit	Credit
Cash	$    1,55,000
Building - new	$ 13,95,000		1550000*155000
Accumulated depreciation- building	$ 12,30,000
Building - old		$   21,50,000
Gain on exchange		$     6,30,000
(To record entry of Southern)
Eastern:
Building - new	$ 15,50,000
Accumulated depreciation- building	$    6,80,000
Building - old		$   17,50,000
Gain on exchange		$     3,25,000
Cash		$     1,55,000
(To record entry of Eastern)

Please Like