rodriguez company pays $342,225 for real estate with land, land improvements, and a building. land is…

rodriguez company pays $342,225 for real estate with land, land improvements, and a building. land is appraised at $238,500; land improvements are appraised at $79,500; and the building is appraised at $212,000. complete this question by entering your answers in the tabs below. required 1 required 2 prepare the journal entry to record the purchase. note: round your answers to 2 decimal places. view transaction list journal entry worksheet a record the costs of lump - sum purchase. note: enter debits before credits.

rodriguez company pays $342,225 for real estate with land, land improvements, and a building. land is appraised at $238,500; land improvements are appraised at $79,500; and the building is appraised at $212,000. complete this question by entering your answers in the tabs below. required 1 required 2 prepare the journal entry to record the purchase. note: round your answers to 2 decimal places. view transaction list journal entry worksheet a record the costs of lump - sum purchase. note: enter debits before credits.

Answer

Explanation:

Step1: Calculate the total appraised value

$238500 + 79500+212000 = 530000$

Step2: Allocate cost to land

$\frac{238500}{530000}\times342225\approx154342.50$

Step3: Allocate cost to land - improvements

$\frac{79500}{530000}\times342225\approx51447.50$

Step4: Allocate cost to building

$\frac{212000}{530000}\times342225\approx136435.00$

Step5: Record journal - entry

Debit Land $154342.50$ Debit Land Improvements $51447.50$ Debit Building $136435.00$ Credit Cash $342225.00$

Answer:

Account Titles and Explanation Debit ($) Credit ($)
Land 154342.50
Land Improvements 51447.50
Building 136435.00
Cash 342225.00