Part 2 (6 points) Southern Company has a building with fair value of $1,400,000 and book value of $800,000 (original cost of $2,000,000 less accumulated depreciation of $1,200,000). Southern exchanges this building for another building owned by Eastern Company. Easterns building has a book value of $950,000 (original cost of $1,600,000 less accumulated depreciation of $650,000). Eastern also gives Southern $140,000 to complete this exchange.

Required: Prepare the journal entries to record the exchange on the books of both Southern Company and Eastern Company.

Southern Companys Journal Entry:

The fair value of the new building (Easterns building) = _______________________________

	Debit	Credit

Eastern Companys Journal Entry:

The fair value of new building (Southerns building) = _________________________________

	Debit	Credit