Suppose the rate of return on a 10-year T-bond is currently 5.00% and that on a 10-year Treasury Inflation Protected Security (T
2 answers:
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Answer:
1. Debit Fixed Asset (Property) $519,000
Credit Cash $519,000
This can be further split into
Dr Building $406,000
Dr Land $113,000
Cr Cash $519,000
2. $50,400
3. $393,200
Explanation:
1. The total cost incurred in the acquisition of the property (Land and building) is $519,000 as shown below
Cost =
= 519,000
This can be split further into the cost for land and cost for building
Cost of Land =
Cost of Building=
=
2.
3. Netbook value (NBV) at the end of year 2