Prepare the journal entry for alex co

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Reference no: EM133122667

Question - Alex Co exchanged a Machinery with Fred Inc. in exchange for a building. Alex also paid 60,000 to Fred for this exchange. Other details of the transaction are provided below:

Alex Co. equipment: Fred Inc. Building: Cost $850,000

Cost $620,000

Accumulated depreciation 120,000

Accumulated depreciation 190,000

Fair value 560,000

Fair value 520,000

Required -

a) Prepare the journal entry in the books of both companies, assuming both are publicly traded.

b) Assuming now that Alex is a private company and that the fair value of building is the most reliable fair value, prepare the journal entry for Alex Co.

Reference no: EM133122667

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