Lexington Garden Supply paid $210,000 for a group purchase of land, building, an

Question

Lexington Garden Supply paid $210,000 for a group purchase of land, building, and equipment. At the time of the acquisition, the land had a market value of $110,000, the building S66,000, and the equipment $44,000. Joumalize the lump-sum purchase of the three assets for a total cost of $210,000, the amount for which the business signed a note payable. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal antry table.) Date Accounts and Explanation Debit Credit

Explanation / Answer

Amount to be allocated is calculated as follows: market va % amount to b allocated (a) (b) c=a*b Item land 110,000 50.00% 210,000 105000 Building 66,000 30.00% 210,000 63000 Equipment 44,000 20.00% 210,000 42000 total 220,000 210000 Journal Entry Date Accounting titles and explanations Debit Credit Land 105,000 Building 63,000 Equipment 42,000 Notes payable 210,000

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