Asset exchange – no commercial substance
Syria Corp. exchanged Building 24, which has an appraised value of $ 1,700,000, a cost of $ 2,800,000, and accumulated depreciation of $ 1,300,000, for Building M which belongs to Russia Ltd. Building M has an appraised value of $ 1,620,000, a cost of $ 3,100,000, and accumulated Depreciation of $ 1,750,000. Russia paid Syria the difference between the appraised values of the two buildings. Assume depreciation has been updated to the date of exchange.
Instructions
Prepare the entries on both companies’ books, assuming the buildings are similar assets.

Question

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The Answer of Asset exchange – no commercial substance
Syria Corp. exchanged Building 24, which has an appraised value of $ 1,700,000, a cost of $ 2,800,000, and accumulated depreciation of $ 1,300,000, for Building M which belongs to Russia Ltd. Building M has an appraised value of $ 1,620,000, a cost of $ 3,100,000, and accumulated Depreciation of $ 1,750,000. Russia paid Syria the difference between the appraised values of the two buildings. Assume depreciation has been updated to the date of exchange.
Instructions
Prepare the entries on both companies’ books, assuming the buildings are similar assets.

Asset Exchange – No Commercial Substance