The exchange has commercial substance

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Reference no: EM131295158

Southern company owns a building that it leases. The building's fair value is 1400000 and its book value is 800000( cost 2,000,000 - accum depre 1,200,000). Southern exchanged this for another building owned by the Eastern company. The building book value is 950,000(1,600,000-650,000) eastern also gives southern 140,000 to complete the exchange. The exchange has commercial substance.

Prepare journal for both company

Reference no: EM131295158

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