On January 1, 2016, Coopers Industries bought a parcel of land for use in its operations by paying the seller $400,000 in cash and signing a five year, 12% note payable in the amount of $100,000. In the connection with purchase of the land, Coopers incurred legal fees of $19,000, a real estate agent sales commission of $25,000, surveying fees of $1,000, and an appraisal fee of $5,000. Required: Part a. Compute the total acquisition cost of the parcel of land. Part b. Prepare the journal entry to record the purchase of the parcel of the land.

On January 1, 2016, Coopers Industries bought a parcel of land for use in its operations by paying the seller $400,000 in cash and signing a five year, 12% note payable in the amount of $100,000. In the connection with purchase of the land, Coopers incurred legal fees of $19,000, a real estate agent sales commission of $25,000, surveying fees of $1,000, and an appraisal fee of $5,000. Required: Part a. Compute the total acquisition cost of the parcel of land. Part b. Prepare the journal entry to record the purchase of the parcel of the land.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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