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Tipton Company purchases land for $560,000 with a note payable for the same amount. The company also pays cash of $2,100 for a survey fee and $3,100 for broker commissions. The journal entry would be: O Land 565,200 Notes Payable Cash O Land OO Notes Payable O Land Cash O Land Broker & Survey Expense Notes Payable 565,200 560,000 560,000 5,200 560,000 5,200 565,200 560,000 565,200

Tipton Company purchases land for $560,000 with a note payable for the same amount. The company also pays cash of $2,100 for a survey fee and $3,100 for broker commissions. The journal entry would be: O Land 565,200 Notes Payable Cash O Land OO Notes Payable O Land Cash O Land Broker & Survey Expense Notes Payable 565,200 560,000 560,000 5,200 560,000 5,200 565,200 560,000 565,200

FINANCIAL ACCOUNTING
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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**Example Journal Entry for Land Purchase** **Scenario:** Tipton Company purchases land for $560,000 with a note payable for the same amount. The company also pays cash of $2,100 for a survey fee and $3,100 for broker commissions. **Correct Journal Entry:** - **Debit: Land $560,000** - **Debit: Broker & Survey Expense $5,200** - **Credit: Notes Payable $565,200** **Explanation:** The above entry reflects the full land purchase amount on the note payable and includes the additional expenses for the survey fee and broker commission in one debit entry. The total cash expenditure is $5,200, which incorporates both the survey fee and broker commission.
Transcribed Image Text:**Example Journal Entry for Land Purchase** **Scenario:** Tipton Company purchases land for $560,000 with a note payable for the same amount. The company also pays cash of $2,100 for a survey fee and $3,100 for broker commissions. **Correct Journal Entry:** - **Debit: Land $560,000** - **Debit: Broker & Survey Expense $5,200** - **Credit: Notes Payable $565,200** **Explanation:** The above entry reflects the full land purchase amount on the note payable and includes the additional expenses for the survey fee and broker commission in one debit entry. The total cash expenditure is $5,200, which incorporates both the survey fee and broker commission.
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