Lela Corp. purchased land and buildings in 2015 for $4,000,000. $1.4 million of the purchase price was allocated to land, the balance to buildings. At the time of purchase it was estimated that the building would have a useful life of 30 years but no residual value.
In 2024, Lela Corp. exchanged the land and buildings for an undeveloped land parcel and $100,000 cash. The fair market value of the assets given up was estimated to be $6.2 million; the fair value of the land received was $6.1 million.
Lela Corp. depreciates its buildings using the straight-line method. Its policy is to record a full year of depreciation expense in the year of acquisition and no depreciation expense in the year of disposal.

Required:
a. Prepare the journal entry to record the derecognition of the asset in 2024, assuming that the transaction has commercial substance.
b. Prepare the journal entry to record the derecognition of the asset in 2024, assuming that the transaction lacks commercial substance.