Company Inc., exchanged land and cash of $8,000 for equipment. The land was purchased at $55,000 a few years ago and a fair value of $60,000. Prepare the journal entry to record the exchange. Assume the exchange has no commercial substance.

Company Inc., exchanged land and cash of $8,000 for equipment. The land was purchased at $55,000 a few years ago and a fair value of $60,000. Prepare the journal entry to record the exchange. Assume the exchange has no commercial substance.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 6MC: Ashton Company exchanged a nonmonetary asset with a cost of 30,000 and accumulated depreciation of...

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Question

Company Inc., exchanged land and cash of $8,000 for equipment. The land was purchased at $55,000 a few years ago and a fair value of $60,000.

Prepare the journal entry to record the exchange. Assume the exchange has no commercial substance.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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