Behren Company purchased a building and the parcel of land on which the building was located for a total purchase price of $810,000. To record the acquisition, the account, Building, should be debited for $810,000.

Question

Quizplus · Accepted Answer

The total purchase price of $810,000 should be allocated between the building and the land based on their relative fair market values, not all debited to the Building account.

Behren Company Purchased a Building and the Parcel of Land