A Company Owns a Piece of Land That Originally Cost

question 60

Short Answer

A company owns a piece of land that originally cost $10,000 and has a fair market value of $8,000.It is exchanged along with $5,000 cash for another piece of land having a fair value of $13,000.The exchange had commercial substance.The proper journal entry to record this transaction is

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Definitions:

Journal Entries

The basic unit of accounting record that details a financial transaction, showing debits and credits to accounts impacted by the transaction.

Honoring

The act of fulfilling or adhering to agreements, commitments, or payments.

Dishonoring

Dishonoring occurs when a promised payment, such as a check or electronic payment, is not completed due to insufficient funds or rejection by the bank.

Note Receivable

A written promise for a specified amount of money to be paid by a debtor at a certain future date.