Question
On November 1, McGraw Corp. purchased land by transferring $60,000 cash and a building to the other company. The building it gave up has an
On November 1, McGraw Corp. purchased land by transferring $60,000 cash and a building to the other company. The building it gave up has an original cost of $900,000, a book value of $400,000, and a fair market value of $700,000.
1. Prepare the journal entry McGraw should make to record the exchange of the building and cash for the land, assuming the exchange has commercial substance.
| Date |
| Debit | Credit |
| Nov 1 |
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2. If the above exchange were deemed to have non-commercial substance, by what amount should the Land account be debited?
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Fundamentals of Financial Accounting
Authors: Fred Phillips, Robert Libby, Patricia Libby
5th edition
978-0078025914
