Prepare the journal entries, Financial Accounting

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Moore Corportation follows a policy of a 10% depreciation charge per year on all machinery and a 5% depreciation charge per year on buildings (the corportation uses the nearest full month assumption to calculate depreciation). The following occurred in 2015:

A. March 31, 2015 - Negotiations which began in 2014 were completed and a building purchased 1/1/06 (depreciation has been properly charged through December 31, 2014) at a cost of $6,400,000 with a fair value of $4,000,000 exchanged for a second building which also had a fair value of $4,000,000. The exchange had no commercial subtance. Both parcels of land on which the buildings were located were equal in value, and had a fair value equal to book value.

Prepare the journal entries to record derpeciation on the old building and nonmonetary exchange on March 15, 2015.

 


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