1.fair value of equipment =fair value of land - cash received =$160,000-15,000
=>$145,000.
2.journal entry to record the exchange of assets.
event | general journal | debit | credit |
1 | equipment a/c | 145,000 | |
cash a/c |
15,0000 | ||
...........To land a/c | 125,000 | ||
............To gain a/c | 35,000 | ||
(amount of gain =160,000 fair value- 125,000 book value =35,000) |
The Bronco Corporation exchanged land for equipment. The land had a book value of $125.000 and...
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