Two independent companies, Denver and Bristol, each own a warehouse, and they agree to exchange them. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 47,000 45,000 Bristol agrees to pay Denver $2,000 to complete the exchange. Required: Assuming the transaction has commercial substance, prepare journal entries for Denver and Bristol to record the exchange. CHART OF ACCOUNTS Denver and Bristol General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Building (Warehouse (new)) 182 Building (Warehouse (old)) 185 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings Assume the exchange has commercial substance and occurred on April 1. Prepare journal entries for Denver and Bristol to record the exchange. General Journal Instructions GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to exchange them. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $62,000 Accumulated depreciation 50,000 25,000 Fair value 47,000 45,000 Bristol agrees to pay Denver $2,000 to complete the exchange. Required: Assuming the transaction has commercial substance, prepare journal entries for Denver and Bristol to record the exchange. CHART OF ACCOUNTS Denver and Bristol General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Building (Warehouse (new)) 182 Building (Warehouse (old)) 185 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings Assume the exchange has commercial substance and occurred on April 1. Prepare journal entries for Denver and Bristol to record the exchange. General Journal Instructions GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 37CE
Related questions
Question
Two independent companies, Denver and Bristol, each own a warehouse, and they agree to exchange them. The following information for the two warehouses is available:
|
|
Denver
|
Bristol
|
| Cost | $100,000 | $62,000 |
| 50,000 | 25,000 | |
| Fair value | 47,000 | 45,000 |
Bristol agrees to pay Denver $2,000 to complete the exchange.
Required:
| Assuming the transaction has commercial substance, prepare |
| CHART OF ACCOUNTS | ||||||||||||||||||||||||||||||||||
| Denver and Bristol | ||||||||||||||||||||||||||||||||||
| General Ledger | ||||||||||||||||||||||||||||||||||
|
Assume the exchange has commercial substance and occurred on April 1. Prepare journal entries for Denver and Bristol to record the exchange.
General Journal Instructions
GENERAL JOURNAL
| DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
|---|---|---|---|---|---|
|
1
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
5
|
|
|
|
|
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you