P. Chang & Co. exchanged land and $9,000 cash for equipment. The book value and the fair value of the land were $106,000 and $90,000, respectively. Assuming that the exchange has commercial substance, Chang would record equipment and a gain/(loss) of:

Question

Quizplus · Accepted Answer

$$\begin{array} { | l | r | r | } 
\hline \text { Equiprnent } ( FV\text { of land } + \$ 9,000 ) & 99,000 & \
\hline \text { Loss } ( \$ 106,000 - 90,000 ) & 16,000 & \
\hline \text { Cash } & & 9,000 \
\hline \text { Land (book value) } & & 106,000 \
\hline
\end{array}$$

P Chang & Co