Shidan Apartments purchased an apartment building to rent to university students on November 18, 2016.The following costs were incurred during 2016, before the tenants moved in: $$\begin{array} { l r }
\text { Purchase price of the building } & \$ 220,000 \
\text { Purchase price of the land } & 100,000 \
\text { Transfer taxes } & 10,000 \
\text { Interest incurred on the mortgage loan to purchase } & 4,000 \
\text { Attorney and real estate agent's fees } & 15,000 \
\text { Repave the parking lot } & 6,000
\end{array}$$ ? How much will Shidan Apartments record as an asset?

Question

Shidan Apartments purchased an apartment building to rent to university students on November 18, 2016.The following costs were incurred during 2016, before the tenants moved in: $$\begin{array} { l r } 
\text { Purchase price of the building } & \$ 220,000 \
\text { Purchase price of the land } & 100,000 \
\text { Transfer taxes } & 10,000 \
\text { Interest incurred on the mortgage loan to purchase } & 4,000 \
\text { Attorney and real estate agent's fees } & 15,000 \
\text { Repave the parking lot } & 6,000
\end{array}$$ ? How much will Shidan Apartments record as an asset?

Quizplus · Accepted Answer

The asset value includes the purchase price of the building and land, transfer taxes, and attorney and real estate agent's fees. Interest and repaving are not included. Total: $220,000 + $100,000 + $10,000 + $15,000 = $345,000.

Shidan Apartments Purchased an Apartment Building to Rent to University