On August 7 Gideon Ridge Restaurant purchased a building in exchange for a note with a face amount of $1660000.The cost of the land was $600000.The building cost $900000 and the parking lot was valued at $160000.Use the following tabular analysis to record the transaction.
A)Increase Building and increase Notes Payable $1660000.
B)Increase Land $600000 increase Land Improvements $160000 increase Building $900000 and increase Notes Payable $1660000.
C)Increase Land $600000 increase Land Improvements $160000 increase Building $900000 and decrease Notes Payable $1660000.
D)Increase Building $760000 increase Land $600000 and increase Notes Payable $1660000.

Question

On August 7 Gideon Ridge Restaurant purchased a building in exchange for a note with a face amount of $1660000.The cost of the land was $600000.The building cost $900000 and the parking lot was valued at $160000.Use the following tabular analysis to record the transaction. 
A)Increase Building and increase Notes Payable $1660000. 
B)Increase Land $600000 increase Land Improvements $160000 increase Building $900000 and increase Notes Payable $1660000. 
C)Increase Land $600000 increase Land Improvements $160000 increase Building $900000 and decrease Notes Payable $1660000. 
D)Increase Building $760000 increase Land $600000 and increase Notes Payable $1660000.

Quizplus · Accepted Answer

The transaction involved the purchase of a building, land, and parking lot for a total amount of $1,660,000. The cost breakdown is as follows: $900,000 for the building, $600,000 for the land, and $160,000 for the parking lot. Therefore, to record the transaction, we need to increase Land by $600,000, increase Land Improvements (which includes the parking lot) by $160,000, increase Building by $900,000, and increase Notes Payable by $1,660,000. So, option B is the correct answer.

On August 7 Gideon Ridge Restaurant Purchased a Building in Exchange