Another method very frequently used in disposing of real estate is in the nature of an exchange, the owner selling his property and taking in payment therefor other property, with perhaps some cash payment in addition. The entering of such a transaction on the books is a simple matter, and takes the following form in the journal:

Real Estate .................................

$......

To Real Estate.......................

$......

For exchange of property No .......for property.......No...

The most important point for investigation in such transactions is the value at which the new property is taken, for it sometimes happens that matters other than the actual cash value of the property are taken into consideration when the exchange is made; and the amount allowed for the property received may not indicate its market value, since it is not unusual to place a higher valuation on property when it is paid for "in trade" than would be asked if the consideration were cash. For instance, the owner of a piece of property may be willing to give it in exchange, at less than its actual value, for other property situated in a neighborhood in which he is interested, or which is suitable for some special purpose which he desires to carry out. It is evident that in such a case the property so acquired may be brought on the books at a figure in excess of its market value.