On April 1 2017 Kingbird Company received a condemnation awa

On April 1, 2017, Kingbird Company received a condemnation award of $516,000 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 $72,000 and $336,000, respectively, when they were acquired. At April 1, 2017, the accumulated depreciation relating to the building amounted to $192,000. On August 1, 2017, Kingbird purchased a piece of replacement property for cash. The new land cost $108,000, and the new building cost $480,000.

Prepare the journal entries to record the transactions on April 1 and August 1, 2017. (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

Solution

     Date

    Account titles and explanation

    Debit

   Credit

    April 1

Cash

$       5,16,000

Accumulated depreciation - buildings

$       1,92,000

                          land

$         72,000

                          buildings

$     3,36,000

                         gain on disposal of plant assets

$     3,00,000

   April 1

land

$       1,08,000

Buildings

$       4,80,000

             cash

$     5,88,000