Catherwood Inc.purchased a piece of real estate in early 2016.The staff accountant allocated the $5,000,000 purchase price as follows: 30% to land,50% to building,and 20% to fixtures.Catherwood recorded straight-line depreciation based on useful lives of 20 years and 5 years on the building and fixtures,respectively.No residual value was assigned to either depreciable asset.The company has a policy of recording a full year of depreciation in the year of acquisition,and none in the year of disposal.
In 2020 a Catherwood staff in the accounting department discovered that the bundled purchase actually cost $6,000,000 and the extra $1,000,000 was debited to land,while the remaining $5,000,000 was allocated 30% to land,50% to building,and 20% to fixtures.The accounting staff believe that the allocation of 30% to land,50% to building,and 20% to fixtures still applies.
Required:
Record any adjusting entries required to correct the accounts in 2020 and provide supporting calculations.

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The Answer of Catherwood Inc.purchased a piece of real estate in early 2016.The staff accountant allocated the $5,000,000 purchase price as follows: 30% to land,50% to building,and 20% to fixtures.Catherwood recorded straight-line depreciation based on useful lives of 20 years and 5 years on the building and fixtures,respectively.No residual value was assigned to either depreciable asset.The company has a policy of recording a full year of depreciation in the year of acquisition,and none in the year of disposal.
In 2020 a Catherwood staff in the accounting department discovered that the bundled purchase actually cost $6,000,000 and the extra $1,000,000 was debited to land,while the remaining $5,000,000 was allocated 30% to land,50% to building,and 20% to fixtures.The accounting staff believe that the allocation of 30% to land,50% to building,and 20% to fixtures still applies.
Required:
Record any adjusting entries required to correct the accounts in 2020 and provide supporting calculations.