The Tinsley Company exchanged land that it had been holding forfuture plant expansion for...

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Accounting

The Tinsley Company exchanged land that it had been holding forfuture plant expansion for a more suitable parcel located fartherfrom residential areas. Tinsley carried the land at its originalcost of $106,250. According to an independent appraisal, the landcurrently is worth $255,000. Tinsley paid $34,000 in cash tocomplete the transaction.

Required:
1. What is the fair value of the new parcel ofland received by Tinsley assuming the exchange has commercialsubstance?
2. Prepare the journal entry to record theexchange assuming the exchange has commercial substance.
3. Prepare the journal entry to record theexchange assuming the exchange lacks commercial substance.
4. Prepare the journal entry to record theexchange except that Tinsley received $51,000 in theexchange, and the exchange lacks commercial substance.

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In: AccountingThe Tinsley Company exchanged land that it had been holding forfuture plant expansion for a...The Tinsley Company exchanged land that it had been holding forfuture plant expansion for a more suitable parcel located fartherfrom residential areas. Tinsley carried the land at its originalcost of $106,250. According to an independent appraisal, the landcurrently is worth $255,000. Tinsley paid $34,000 in cash tocomplete the transaction.Required:1. What is the fair value of the new parcel ofland received by Tinsley assuming the exchange has commercialsubstance?2. Prepare the journal entry to record theexchange assuming the exchange has commercial substance.3. Prepare the journal entry to record theexchange assuming the exchange lacks commercial substance.4. Prepare the journal entry to record theexchange except that Tinsley received $51,000 in theexchange, and the exchange lacks commercial substance.