Southern Company owns a building that it leases to others. The building’s fair value is $2,350,000...
Southern Company owns a building that it leases to others. The building’s fair value is $2,350,000 and its book value is $1,560,000 (original cost of $2,950,000 less accumulated depreciation of $1,390,000). Southern exchanges this for a building owned by the Eastern Company. The building’s book value on Eastern’s books is $1,710,000 (original cost of $2,550,000 less accumulated depreciation of $840,000). Eastern also gives Southern $235,000 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 Eastern. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Homework Answers
| Southern: | |||
| Cash | 235000 | ||
| Building - new | 2115000 | =2350000-235000 | |
| Accumulated depreciation- building | 1390000 | ||
| Building - old | 2950000 | ||
| Gain on exchange | 790000 | ||
| Eastern: | |||
| Building - new | 2350000 | ||
| Accumulated depreciation- building | 840000 | ||
| Building - old | 2550000 | ||
| Gain on exchange | 405000 | ||
| Cash | 235000 | ||
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Southern Company owns a building that it leases to others. The
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15? Exercise 8-15 Extraordinary repairs; plant asset age LO C3 Martinez Company owns a building that...
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Exercise 8-15 Extraordinary repairs; plant asset age LO C3 Martinez Company owns a building that appears on its prior year-end balance sheet at its original $760,000 cost less $570,000 accumulated depreciation. The building is depreciated on a straight-line basis assuming a 20-year life and no salvage value. During the first week in January of the current calendar year, major structural repairs are completed on the building at a $76,000 cost. The repairs extend its useful life for 5 years...
Plz
help me
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