On 13 September 20X1, Nitish Corporation’s board of directors moved the company’s operations into a newly constructed building and declared its old building available for sale. The original cost of the old building was $ 20 million; it was 40% depreciated. Other information is as follows:
a. On 15 September, a professional appraisal of the old building estimated its value as $ 10 million.
b. On 24 September, Nitish Corporation engaged a commercial property developer to place the building on the market for $ 10 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 6% on final sale.
c. By 31 December, the commercial real estate market had “softened” considerably. Although the developer held the official asking price at $ 10 million, Nitish and the developer agreed they would consider offers as low as $ 8.5 million.
d. Despite receiving several “low-ball” offers from prospective buyers over the first two months of 20X2, Nitish’s management did not accept any of the offers.
e. By 31 March 20X2, the end of Nitish’s first reporting quarter, the market had improved considerably. The developer relisted the property at $ 11.5 million, its newly appraised value. f. On 27 April 20X2, Nitish’s board accepted an offer of $ 11.7 million.
Prepare the appropriate general journal entries to record the information above.