July 1, 2016, Seaver sold a building to Hane Company, accepting a 2-year, $100,0
ID: 2460732 • Letter: J
Question
July 1, 2016, Seaver sold a building to Hane Company, accepting a 2-year, $100,000 non-interest-bearing note due July 1, 2018. The fair value of the building was $82,644.60 on the date of the sale. The building had been purchased at a cost of $90,000 on January 1, 2011, and had a book value of $67,500 on December 31, 2015. It was being depreciated on a straight-line basis (no residual value) over a 20-year life.
Prepare all the journal entries on Seaver’s books for July 1, 2016, through July 1, 2018, in regard to the Hane note.Explanation / Answer
1- 2 year non interest bearing note debit 100000
depreciation on machine debit 4500
credit building 63000
credit profit on the sale of building 32500
2- Cash debit 100000
credit 2 year non interest bearing note 100000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.