### Journal Entry for Purchase of Building and LandOn October 17, Nikle Company purchased a building and a plot of land for $482,500. The building was valued at $250,900 while the land carried a value of $231,600. Nikle paid $68,500 down in cash and signed a note payable for the balance.**Prepare the journal entry for this transaction. If an amount box does not require an entry, leave it blank.**| Oct. 17 | [Select] | [ ] | [ ] ||---------|------------------------------|-----------|-----------------|| Oct. 17 | [Select] | [ ] | [ ] || Oct. 17 | [Select] | [ ] | [ ] |Please select the appropriate accounts and amounts for each part of the journal entry.#### Explanation of Journal Entry Details:You will need to:1. **Debit the Land account** for the cost of the land ($231,600).2. **Debit the Buildings account** for the cost of the building ($250,900).3. **Credit the Cash account** for the down payment made in cash ($68,500).4. **Credit Notes Payable** for the balance owing on the note payable, which is calculated as: \[ \text{Total Purchase Price} - \text{Cash Payment} = $482,500 - $68,500 = $414,000 \]### Example Journal Entry| Oct. 17 | Land | 231,600 | ||---------|-------------------------------|-----------|-----------------|| Oct. 17 | Buildings | 250,900 | || Oct. 17 | Cash | | 68,500 || Oct. 17 | Notes Payable | | 414,000 |### Further Explanation:- **Debit Land and Buildings** because these are assets being acquired, thus increasing the asset accounts.- **Credit Cash** because the company is paying out cash, which decreases the cash account.- **Credit Notes Payable** for the remaining balance as it represents a liability that will be paid off in the future.

In the context of the given question, we are required to prepare the journal entry. Journal entry:…

On October 17, Nikle Company purchased a building and a plot of land for $482,500. The building was valued at $250,900 while the land carried a value of $231,600. Nikle paid $68,500 down in cash and signed a notes payable for the balance. Prepare the journal entry for this transaction. If an amount box does not require an entry, leave it blank. Oct. 17

On October 17, Nikle Company purchased a building and a plot of land for $482,500. The building was valued at $250,900 while the land carried a value of $231,600. Nikle paid $68,500 down in cash and signed a notes payable for the balance. Prepare the journal entry for this transaction. If an amount box does not require an entry, leave it blank. Oct. 17

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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