Question

Question 3 0.37/1 View Policies Show Attempt History Current Attempt in Progress Ivanhoe Company purchased land and a building on April 1, 2019, for $356,400. The company paid $104,400 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $138,000 and the building, $218,400. The building was estimated to have a 25-year useful life with a $31,500 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2019 Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 2020 Feb. 17 Paid $190 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $109,700 and the building, $228,000. 2021 Jan. 31 Sold the land and building for $296,000 cash: $103,000 for the land and $193,000 for the building. Feb. 1 Paid the note payable and interest owing.

Answer 1

JOURNAL ENTRIES Details Debit ($) Credit (S) Date 2019 Dec-31 Depreciation - Expense Accumulated Depreciation - Building 5607 5607 Dec-31 Interest Expense Bank / Cash 9450 9450 2020 Feb-17 Maintenance Charges Cash 190 190 Dec-31 7476 Depreciation - Expense Accumulated Depreciation - Building 7476 Dec-31 12600 Interest Expense Bank / Cash 12600 Dec-31 No Entry Required 2021 Jan-31 Depreciation - Expense Accumulated Depreciation - Building 623 Jan-31 Cash Accumulated Dep - Building Loss on sale of Building Loss on sale of Land Land and Building 296000 13706 11694 35000 356400 Feb-01 Notes Payable Interest Expense Cash 252000 1050 253050