Kerry, Inc., exchanged land and cash of $8,900 for equipment. The land had a book value of $64,000 and a fair value of $69,900.

Business

1 answer:

kipiarov [429]4 years ago

3 0

Answer:

Explanation:

The journal entry is shown below:

Equipment A/c Dr $78,800

To Gain on exchange A/c $5,900

To Land A/c $64,000

To Cash A/c $8,900

(Being the exchange is recorded and the remaining balance is credited to the gain on exchange account)

The equipment value is computed below:

= Fair value + exchange value

= $69,900 + $8,900

= $78,800

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