For the year ended December 31, 2018, Oriole Ltd. had the following transactions
ID: 2606597 • Letter: F
Question
For the year ended December 31, 2018, Oriole Ltd. had the following transactions related to the purchase of property. Assume all transactions are for cash unless otherwise stated Feb. 7 Purchased real estate for $1.1 million, paying $311,000 cash and signing a mortgage payable for the balance. The site had an old building on it and the current values of the land and building were $1 million and $101,200, respectively. The old building will be demolished and a new apartment building will be constructed on the site 9 Paid legal fees of $21,930 on the real estate purchase of February 7 Paid $62,790 to demolish the old building and make the land ready for the construction of the apartment building Received $15,920 from the sale of material from the demolished building Paid $4,000 to grade the land in preparation for the construction of the apartment building Paid architect fees of $78,740 to design the apartment building The full cost for construction of the apartment building was $2.7 million. Paid $742,570 cash and signed a bank loan payable for the balance Purchased a one-year insurance policy on the finished building for $9,380 Paid $47,840 for the paving of sidewalks and a parking lot for the building 15 16 28 Mar. 2 July 2 3 Aug. 29Explanation / Answer
Journal Entries :-
Date Particulars Debit($) Credit($) Feb 7, 2018 Land A/c Dr. 1100000 To Cash a/c 311000 To Mortgage Payable 789000 Feb 9, 2018 Land A/c Dr. 21930 To Cash A/c 21930 (Legal fees paid on purechase) Feb 15, 2018 Land A/c Dr. 62790 To Cash A/c 62790 (To record amount paid to demolish old building on land) Feb 16, 2018 Cash a/c Dr. 15920 To Land a/c 15920 (To recored amount receive from building scrap) Feb 28 Building A/c Dr. 4000 To Cash A/c 4000 (Amount Paid for grading Land) Mar 2, 2018 Building A/c Dr. 78740 To Cash A/c 78740 (To recored payment to architect for design) Jul 2, 2018 Building A/c Dr. 1309400 To Cash A/c 351700 To Bank Loan A/c 957700 (Amount Paid for Building) Jul 3, 2018 Building A/c Dr. 9380 To Cash A/c 9380 (To Recored Insurance for new building) Aug 29, 2018 Land Improvements A/c Dr. 47840 To Cash A/c 47840 (To Recored Payment for sidewalks and parking)