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AcademicGround >> Need help with accounting, please

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3/21/07 9:16 PM
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donnie
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Edited: 21-Mar-07
Member Since: 01/01/2001
Posts: 1222
 
Need help posting to a general journal.

Does this look right?

7 Purchased  Real Estate for $410,000.  The Real Estate consisted of  
  Land and a Building attached to the land.  According to an Expert appraiser,
  the Land by is worth $100,000 and the building is worth $400,000.  The  
  purchase was paid for by making a $160,000 cash payment and issuing  
  a $250,000 Mortgage note payable.  In recording this transaction, make the
  proper allocations between land and buildings.      


7 Cash    $160,000.00  
  Note Payable    $250,000.00  
       Land      $  82,000.00
       Building      $328,000.00
    Purchased land and building for      
    $410,000. Total of both appraised at $500,000.      
           
3/25/07 4:43 AM
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AaronU
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Edited: 25-Mar-07
Member Since: 09/26/2003
Posts: 2338
Looks fine, except cash/NP should be credits and Land/Bldg should be debits. A business owner would allocate as much as possible to building, so they could save taxes thru depreciation.

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