Question
i need help show your work II . (16 points) Santos Corporatio n had the following two exchanges of property, plant, and equipment during 2023
i need help show your work II. (16 points) Santos Corporation had the following two exchanges of property, plant, and equipment during 2023:
Assets Given Assets Received
a. Land Cost $1,000,000 Land Fair Value $1,000,000
Fair value $1,000,000
Building Cost $4,800,000 Building Fair Value $3,000,000
Accumulated depreciation $2,160,000
Fair value $3,000,000
Transaction a lacks commercial substance.
b. Equipment Cost $540,000 Land Fair Value $520,000
Accumulated depreciation $460,000
Fair value ?
Cash $340,000
Transaction b has commercial substance.
Requirement:
Prepare the journal entries to record the two exchanges.
II. (16 points) Santos Corporation had the following two exchanges of property, plant, and equipment during 2023:
Assets Given Assets Received
a. Land Cost $1,000,000 Land Fair Value $1,000,000
Fair value $1,000,000
Building Cost $4,800,000 Building Fair Value $3,000,000
Accumulated depreciation $2,160,000
Fair value $3,000,000
Transaction a lacks commercial substance.
b. Equipment Cost $540,000 Land Fair Value $520,000
Accumulated depreciation $460,000
Fair value ?
Cash $340,000
Transaction b has commercial substance.
Requirement:
Prepare the journal entries to record the two exchanges.
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