DD Ltd Buys a Block of Land from BB Ltd

Multiple Choice

DD Ltd buys a block of land from BB Ltd by paying $95 000 cash and transferring a piece of equipment to BB Ltd.The equipment is recorded in DD Ltd's at $45 000 and it has a fair value of $55 000.DD Ltd pays $25 000 in estate agent's fees to arrange the transfer.Show the journal entries to record this transaction.

A) $\begin{array}{llc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Land } & 175000 & \\\text { Bank } & 120000 & \\\text { Equipment } & & 55000\end{array}$

B) $\begin{array}{llc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Land } & 140000 & \\\text { Bank } & 95000 & \\\text { Equipment } & & 45000\end{array}$

C) $\begin{array}{llc}\text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Land } & 165000 & \\\text { Bank } & 120000 & \\\text { Equipment } & & 45000\end{array}$
D) $\begin{array} { l l l } \text { Accounts } & \text { Debit \$ } & \text { Credit \$ } \\\text { Land } & 175000 & \\\text { Bank } & 120000 & \\\text { Gain on sale of equipment } & & 10000 \\\text { Equipment } & & 45000\end{array}$