Land was purchased costing $98,000; a building was removed at a cost of $5000, with proceeds...
Land was purchased costing $98,000; a building was removed at a cost of $5000, with proceeds of $800 from salvaged materials; broker fees were $3,800; attorney’s fees were $1990; journalize the land purchase (assume 20% paid and remainder assigned to a note).
Homework Answers
Cost of land = Cash purchase price + Removal cost - Salvaged materials + Broker's fees
+ Attorney's fees
= 98,000 + 5,000 - 800 + 3,800 + 1,990
= $ 107,990
JOURNAL
| Date | Account title | Debit | Credit |
| Land | 107,990 | ||
| Cash | 21,598 | ||
| Note Payable | 86,392 | ||
|
(To record purchase of land of $ 107,990 , 20% being paid in cash and remainder by note ) |
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