Polar Sky Railway (PSR),a transportation company,has substantial investments in property,plant,and equipment.In 2017,the company exchanged some of these assets with other companies.[Note: any depreciation expense prior to the following transaction has already been properly recorded.] PSR is trying to expand its business in transportation beyond rail,so the company traded some railcars in return for several trucks.On PSR's books,the railcars had a cost of $12 million,accumulated depreciation of $9 million,and fair value of $6 million.The trucks had a fair value of $5.9 million and were recorded on the seller's books at a cost of $4 million and accumulated depreciation of $1 million.No cash was involved in this exchange.
Required:
Record the journal entry for the above transaction on PSR's books.State your reason(s)for the chosen accounting method.

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The Answer of Polar Sky Railway (PSR),a transportation company,has substantial investments in property,plant,and equipment.In 2017,the company exchanged some of these assets with other companies.[Note: any depreciation expense prior to the following transaction has already been properly recorded.] PSR is trying to expand its business in transportation beyond rail,so the company traded some railcars in return for several trucks.On PSR's books,the railcars had a cost of $12 million,accumulated depreciation of $9 million,and fair value of $6 million.The trucks had a fair value of $5.9 million and were recorded on the seller's books at a cost of $4 million and accumulated depreciation of $1 million.No cash was involved in this exchange.
Required:
Record the journal entry for the above transaction on PSR's books.State your reason(s)for the chosen accounting method.

Polar Sky Railway (PSR),a Transportation Company,has Substantial Investments in Property,plant,and