Financial Reporting

Transaction 1:

During the year Company X (CX) sold a piece of land to Company Y (CY) for $ 75,000. CY is owned 100% by CX. The land was carried on the books of CX at $5,000. The land had been sitting idle in the company. The $ 75,000 was determined by an independent appraisal. CX is in the consulting business and CY is a financial services company.

Transaction 2:

CX sold another piece of land, which had a historical cost of $20,000, to Company Z (CZ), a 70% owned subsidiary. The land had a fair value of $200,000 and had been used as part of company operations. The land value was substantiated by a recent valuation which the company had done (by an independent valuator). In return, CX received cash of $ 200,000. CZ operates a travel agency.

Question:

For both ASPE and IFRS prepare the journal entries for all companies for the transactions above. Support your answer. The tax rate for all companies is 35%. There have been no other related party transactions between these companies in the past.