On November 1, McGraw Corp. purchased land by transferring $60,000 cash and a building to the...

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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. 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 Nov 1 Debit Credit Part B: If the above exchange were deemed to have non-commercial substance, by what amount should the "Land" account be debited? 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. 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 Nov 1 Debit Credit Part B: If the above exchange were deemed to have non-commercial substance, by what amount should the "Land" account be debited?

Answer rating: 100% (QA)

Date November 1 Debit Land 700000 Debit Loss on Exchange 200... View the full answer