PART 1-DISPOSAL ENTRIES FOR QUESTION 6

On 13 September 20X1, Nitish Corp.s board of directors moved the companys operations into a newly constructed building and declared its old building available for sale. The original cost of the old building was $31 million; it was 35% depreciated. Other information is as follows:

1. On 15 September, a professional appraisal of the old building estimated its value as $18 million. Despite some softness in the market the developer expects to be able to sell the building within the next nine months. The developer charges a commission of 4% on final sale. Nitish engaged a commercial property developer to place the building on the market for $18 million.
2. On 24 September, the accountant moved the building to the current assets section of the balance sheet.
3. By 31 December, the commercial real estate market had softened considerably. Although the developer held the official asking price at $18 million, Nitish and the developer agreed they would consider offers as low as $16.5 million.
4. On 27 April 20X2, Nitishs board accepted an offer of $19.7 million.

What is the debit used in the September 13, 20X1 journal entry to adjust the carrying value?	Answer 1Choose...Accumulated Depreciation-Building 10,850,000Building held for sale-current asset 10,850,000Loss on Sale 10,850,000Building 10,850,000Gain on sale 2,880,000
What is the credit used in the September 13, 20X1 journal entry to adjust the carrying value?	Answer 2Choose...Accumulated Depreciation-Building 10,850,000Building held for sale-current asset 10,850,000Loss on Sale 10,850,000Building 10,850,000Gain on sale 2,880,000