Two independent companies, Denver and Bristol, each own a warehouse. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $63,000 Accumulated depreciation 50,000 25,000 Fair value 48,000 46,000 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.
Two independent companies, Denver and Bristol, each own a warehouse. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available: Denver Bristol Cost $100,000 $63,000 Accumulated depreciation 50,000 25,000 Fair value 48,000 46,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Two independent companies, Denver and Bristol, each own a warehouse. On January 1, they agree to an exchange in which no cash changes hands. The following information for the two warehouses is available:
|
|
Denver
|
Bristol
|
| Cost | $100,000 | $63,000 |
| 50,000 | 25,000 | |
| Fair value | 48,000 | 46,000 |
Bristol agrees to pay Denver $2,000 to complete the exchange.
Required:
| Assuming the transaction has commercial substance, prepare |
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