Hello, can somebody please help me with this problem?! On December 1, a tract of

Question

Hello, can somebody please help me with this problem?!


On December 1, a tract of land was purchased as a factory site for $800,000. The old building on the property was razed, and salvaged materials resulting from demolition were sold. Additional costs incurred and salvage proceeds realized during December 2010 were as follows:

Cost to raze old building $70,000
Legal fees for purchase contract and to record ownership $10,000
Title guarantee insurance $16,000
Proceeds from sale of salvaged materials $8,000

Record the land purchase and corresponding payable as of December 31, 2010.


Here's my solution:

Land $800,000
Cost to raze old building 70,000
Legal fees 10,000
Title guarantee insurance 16,000
Less: Proceeds (8,000)
Total $888,000

However, I don't know how journalize these. PLEASE HELP ME!!!

Explanation / Answer

Debit Land, Credit Cash

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