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user100 [1]
3 years ago
5

Charleston Clothing purchased​ land, paying $ 110,000 cash and signing a $ 280,000 note payable. In​ addition, Charleston paid d

elinquent property tax of $ 1,400​, title insurance costing $ 650​, and $ 5,900 to level the land and remove an unwanted building. Record the journal entry for purchase of the land
Business
1 answer:
Reil [10]3 years ago
3 0

Answer:

Dr Land 397,950

    Cr Cash 117,950

    Cr Notes payable 280,000

Explanation:

Certain ordinary and necessary costs can be included in the purchase cost of land:

  • cost of the land
  • title fees
  • applicable taxes
  • legal fees
  • broker fees
  • survey costs
  • leveling costs
  • zoning fees
  • etc.

In this case, the total purchase cost of the land = $110,000 + $280,000 + $1,400 + $650 + $5,900 = $397,950

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3 0
3 years ago
Bramble Corp. purchased land as a factory site for $1305000. Bramble paid $121000 to tear down two buildings on the land. Salvag
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Answer:

Part 1

$1,422,940

Part 2

$331,480

Explanation:

cost of the land calculation

Purchase Price                             $1305000

Cost to tear down building             $121000

Sale of Salvages                               ($8400)

Leagl fees                                           $5340

Total                                            $1,422,940

The cost of the land that should be recorded by Wilson Co. is: $1,422,940

cost of the building calculation

Architect's fees               $47000

Insurance                          $3900

Liability insurance            $4200

Excavation cost               $15480

city for pavement             $9900

Borrowing Costs           $251000

Total                              $331,480

The cost of the building should be recorded by Wilson Co. is $331,480

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