Complete Question:
If a company is considering the purchase of a parcel of land that was acquired by the seller for $94,000, is offered for sale at $168,000, is assessed for tax purposes at $104,000, is recognized by the purchaser as easily being worth $158,000, and is purchased for $155,000, the land should be recorded in the purchaser's books at:
Multiple Choice
$155,000.
$104,000.
$158,000.
$156,500.
$168,000.
Answer:
Since the parcel of land is purchased by the company for $155,000, hence the land should be recorded in the purchaser's books at $155,000.
Explanation:
In case of a fixed asset, a debit of the property account, and a credit to cash or payable funds, or a note payable, based on whether it is a cash transaction, debt acquisition or default, are known as a balance sheet asset.
A provision on the register of deeds and other land rights. Also the preference between parties seeking rights in the same property is decided by a recording statute. See the state of the team, state of a note and status of a non-alert (3 key categories of recordings).
