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 transported some luxury automobiles from the port in Vancouver to Winnipeg "for free." The company does not usually transport cars on this route,so a fair value was not determinable.However,there were negligible incremental costs because doing this involved simply attaching a few extra railcars to an existing train bound for Winnipeg.For doing this,PSR received two luxury cars,which the company awarded to executives as perquisites (perks).These cars had a retail value totaling $450,000.
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 transported some luxury automobiles from the port in Vancouver to Winnipeg "for free." The company does not usually transport cars on this route,so a fair value was not determinable.However,there were negligible incremental costs because doing this involved simply attaching a few extra railcars to an existing train bound for Winnipeg.For doing this,PSR received two luxury cars,which the company awarded to executives as perquisites (perks).These cars had a retail value totaling $450,000.
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