A Company Purchases Property That Includes Land,buildings,and Equipment for $5

question 38

Essay

A company purchases property that includes land,buildings,and equipment for $5.5 million.The company pays $180,000 in legal fees,$220,000 in commissions,and $100,000 in appraisal fees.The land is estimated at 25%,the buildings are at 40%,and the equipment at 35% of the property value.Prepare the journal entry that is required to record the purchase assuming that the company paid 50% of the amounts using cash and signed a note for the remainder.Explain how you derived your answer.

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Definitions:

Plan Of Action

A detailed strategy or course of actions designed to achieve a specific goal or objective.

SOAP Format

A standardized method for documenting medical information, standing for Subjective, Objective, Assessment, Plan.

Source-Oriented Medical Records

A type of medical record keeping where information is organized according to the source that provided the information, such as lab reports, radiology, and physician notes, kept in separate sections.

Social History

An account of a person's past experiences, relationships, and environment, often collected for medical or sociological purposes.