BBC Company purchased a piece of land with a fair value of $120,000 for $100,000 cash....
BBC Company purchased a piece of land with a fair value of $120,000 for $100,000 cash. What is the journal entry to record the land purchase?
a.Debit Land and credit Cash for $100,000
b.Debit Land for $120,000, credit Gain for $20,000, and credit Cash for $100,000
c.Debit Land and credit Cash for $120,000
d.Debit Land for $100,000, debit Gain for $20,000, and credit Cash for $120,000
Homework Answers
The correct option is A.
| Land | $100,000 | |
| To cash | $100,000 | |
| (To record purchase of land) |
The amount of land should be recorded at the amount paid to the purchase of land.
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