On April 1, 2014, Gloria Estefan Company received a condemnation award of $1,001
ID: 2478198 • Letter: O
Question
On April 1, 2014, Gloria Estefan Company received a condemnation award of $1,001,470 cash as compensation for the forced sale of the company’s land and building, which stood in the path of a new state highway. The land and building cost $139,740 and $652,120, respectively, when they were acquired. At April 1, 2014, the accumulated depreciation relating to the building amounted to $372,640. On August 1, 2014, Estafan purchased a piece of replacement property for cash. The new land cost $209,610, and the new building cost $931,600.
Prepare the journal entries to record the transactions on April 1 and August 1, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Date
Account Titles and Explanation
Debit
Credit
April 1
Aug. 1
SHOW LIST OF ACCOUNTS
Date
Account Titles and Explanation
Debit
Credit
April 1
Aug. 1
Explanation / Answer
Answer:
1 April
Dr. Cash $1,001,470
Dr. Accumulated Depreciation—Buildings $372,640
Cr. Land $139,740
Cr. Buildings $652,120
Cr. Gain on Disposal of Plant Assets 582250
1 August
Land A/C Dr. $209,610
Buildings A/C Dr. $931,600
To Cash A/C $ 1141210
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