Question - Disposition of Assets
On April 1, 2010, Pavlova Company received a condemnation award of $410,000 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 $60,000 and $280,000, respectively, when they were acquired. At April 1, 2010, the accumulated depreciation relating to the building amounted to $160,000. On August 1, 2010, Pavlova purchased a piece of replacement property for cash. The new land cost $90,000, and the new building cost $380,000.
Instructions - Prepare the journal entries to record the transactions on April 1 and August 1, 2010.