record the transaction

On December 31, P³ exchanged an office building which it carried on the books at $1,500,000 ($5,000,000 cost), for an office building in a better location. P³ does not believe future cash flows will be substantially different after the exchange. The new building has a fair market value of $1,400,000 and the seller is also contributing $200,000 to sweeten the deal as P³ has other offers that are better offers financially but not as good a location. The new building will have a $100,000 residual and a 25-year life.