Abc company and xyz company entered into a nonmonetary exchange lacking commercial substance. in the exchange, abc gave xyz a building with a book value of $90,000 ($150,000 cost - $60,000 accumulated depreciation) and a fair value of $125,000 in exchange for $25,000 and an xyz building with a book value of $80,000 ($95,000 cost - $15,000 accumulated depreciation) and a fair value of $100,000. prepare the journal entry to record the exchange in abc's and xyz's books. double-click on the shaded cells in the account column and select from the list provided. enter the appropriate amounts in the debit and credit columns.

When a company engages in a non-monetary exchange lacking commercial substance, it must record the acquired asset at the same carrying value as the exchanged asset.

ABC's journal entry:

Dr Cash 25,000

Dr Building - new 75,000

Dr Accumulated depreciation building - old 60,000

    Cr Building - old 150,000

    Cr Gain on the exchange 10,000*

Since the amount of money received is less than 25% of total consideration, the company must recognize a partial gain corresponding only to the cash received. The partial gain is calculated by subtracting the cash received from the fair market value of the asset. In this case, the FMV was $100,000, and the carrying value was 90,000, so the recognized gain must equal $100,000 - $90,000 = $10,000. Then you must adjust the new carrying value to match the FMV - cash ($100,000 - $25,000 = $75,000).

XYZ's journal entry:

Dr Building - new 105,000

Dr Accumulated depreciation building - old 15,000

    Cr Building - old 95,000

    Cr Cash 25,000

Since the transaction lacked commercial substance and XYZ didn't receive any cash, it mus record the new value of the new building by adding the carrying value of the old building plus the boot money paid to ABC (= $80,000 + $25,000 = $105,000).

answer; /// multipotentialite means a person who have many different interests and creative pursuits in life; (one true calling);

polymath; means a person   of wide-ranging knowledge or learning;

scanner; means; a device that captures images from photographic prints,posters,magazine pages.ect;

answerimplicit;