*Problem 9-2A (Part Level Submission) For the year ended December 31, 2015, West
ID: 2397685 • Letter: #
Question
*Problem 9-2A (Part Level Submission) For the year ended December 31, 2015, Westlake Ltd. had the following transactions related to the purchase of property. Assume all transactions are for cash unless otherwise stated. Purchased real estate for $555,100, paying $149,900 cash and signing a mortgage payable for the balance. The site had an old building on it and the fair values of the land and building were $499,700 and $55,400, respectively. The old building will be demolished and a new apartment building will be constructed on the site. Paid legal fees of $10,070 on the real estate purchase of February 7. Paid $32,300 to demolish the old building and make the land ready for the construction of the apartment building. Received $8,100 from the sale of material from the demolished building. Paid $2,000 to grade the land in preparation for the construction of the apartment building Paid architect fees of $35,760 to design the apartment building. The full cost for construction of the apartment building was $1,302,000. Paid $364,90o cash and signed a bank loan payable for the balance. Purchased a one-year insurance policy on the finished building for $5,430. Paid $24,320 for the paving of sidewalks and a parking lot for the building. Feb. 7 9 15 17 28 Mar. 2 July 2 3 Aug. 29 Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit s Feb. 7 ID Feb. 9 Feb. 15[ Feb. 17 Feb. 28 Mar. 2 10
Explanation / Answer
Journal entries: Date Accounts title and explanation Debit $ Credit $ 7-Feb Land Account Dr. 555100 Cassh 149900 Mortgage payable Account 405200 9-Feb Land Account Dr. 10070 Cash account 10070 15-Feb Land Account Dr. 32300 Cash account 32300 17-Feb Cash account dr. 8100 Land account 8100 28-Feb Land Account Dr. 2000 Cash account 2000 2-Mar Building account Dr. 35760 Cash account 35760 2-Jul Building account Dr. 1302000 Cash account 364900 Bank loan payable account 937100 3-Jul Insurance expense Account Dr. 5430 Cash account 5430 29-Aug Land improvements Account Dr. 24320 Cash account 24320
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