Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $2,375,000. Harding paid $700,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $740,000; Building, $2,200,000 and Equipment, $1,460,000. (Round percentages to two decimal places: ie .054 = 5%). What value will be recorded for the building?
$350,000
$175,000
$1,187,500
$2,200,000
10)What journal entry would be used to record the purchase of the above assets?
Land 740,000 Building 2,200,000 Equipment 1,460,000 Cash 4,400,000
Land 740,000 Building 2,200,000 Equipment 1,460,000 Cash 700,000
Notes payable 3,700,000
Land 740,000 Building 2,200,000 Equipment 1,460,000 Cash 1,675,000
Notes payable 700,000
Gain on purchase of long-term assets 2,025,000
Land 403,750 Building 1,187,500 Equipment 783,750 Cash 700,000
Notes payable 1,675,000