A-Plus Carpets Company Buys a Building for $115,000,paying $30,000 Cash

question 192

Essay

A-Plus Carpets Company buys a building for $115,000,paying $30,000 cash and signing a 30-year mortgage note for $85,000 at 11%.Prepare the journal entry for the purchase.Omit explanation.

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Definitions:

Yearly Return

The total gain or loss on an investment over a one-year period, expressed as a percentage of the investment's initial value.

Variable Costs

Expenditures that adjust in relation to the level of production.

Fixed Costs

Costs that do not vary with the level of output produced by a firm, such as rent, salaries, and insurance premiums.

Profit

The financial gain obtained when the revenue from a business activity exceeds the expenses, costs, and taxes.