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What amount should mayo record the receipt of land

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Question - Bell and Mayo are independent entities. Each owns a tract of land being held for development. However, each would prefer to build on the others land. Accordingly, they agreed to exchange their land. From an independent appraisal report and the entities' records, the following information was obtained:

 

Bell's Land

Mayo's Land

Cost and carrying amount

$80,000

$50,000

Fair value

100,000

85,000

Based on the difference in fair values, Mayo paid $15,000 to Bell. If Mayo did not consider the exchange to have commercial substance, at what amount should Mayo record the receipt of land?

Reference no: EM133171734

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