Bahrain Corporation  journal entries

Bahrain Corporation follows a policy of a 10% depreciation charge per year on machinery and a 5% depreciation charge per year on buildings.

The following transactions occurred in 2014:

March 31, 2014          A warehouse which Bahrain had purchased on January 1, 2005 for $1.7 million (with a current fair value of $1 million) was exchanged for another warehouse which also had a current fair value of $1 million. Depreciation has been properly charged from Jan 1, 2005 through Dec 31, 2013. Both parcels of land on which the warehouses were located were equal in value, and had a fair value equal to book value.

June 30, 2014             Machinery with a cost of $120,000 and accumulated depreciation through December 31, 2013 of $90,000 was exchanged, along with $75,000 cash, for a parcel of land with a fair market value of $115,000.

Instructions

Prepare all appropriate journal entries for Bahrain Corporation for the above dates.