Question

The Company acquired land and a building on November 1, 2016 and recorded the $400,000 cash...

The Company acquired land and a building on November 1, 2016 and recorded the $400,000 cash purchase price. The building was removed in 2017 and the Company received $5,000 net of removal costs for the building on December 31, 2017, which has not been recorded. The land will be used for the new facility mentioned above.

How do you record this jounral entry?

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Answer #1
This is a simple gain on demolish of building or residual value of building disposal, normally the value of the land and building
less disposal value will be charged as depreciation. But in the given question it is simply a profit.
Journal Entries
Date Account Title and explanation Debit Credit
Dec 31, 2017 Cash $                     5,000
    To Gain on disposal of building $                       5,000
(To record the net proceeds from disposal of building)
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