Auto Shop, Inc., incurred the following costs in acquiring plant assets:
a. Purchased land with a $100,000 down payment and signed a $75,000 note payable for the balance.
b. Delinquent property tax of $2,500 and legal fees of $1,000 had to be paid before the land could be purchased.
c. $12,000 was paid to demolish an unwanted building on the land.
d. Architect fee of $7,000 was paid for the design of a new office building.
e. An office building was constructed at a cost of $500,000. A long-term note payable was used to pay for the cost.
f. $17,500 was paid for fencing around the new building. $55,000 was paid for paving the parking lot by the new building.
g. $20,000 was paid for lights in the new parking lot.
h. $10,000 was paid for a sprinkler system for the bushes and grass.
Required:
Prepare journal entries for the above transactions. Explanations are not required.

Question

Quizplus · Accepted Answer

The Answer of Auto Shop, Inc., incurred the following costs in acquiring plant assets:
a. Purchased land with a $100,000 down payment and signed a $75,000 note payable for the balance.
b. Delinquent property tax of $2,500 and legal fees of $1,000 had to be paid before the land could be purchased.
c. $12,000 was paid to demolish an unwanted building on the land.
d. Architect fee of $7,000 was paid for the design of a new office building.
e. An office building was constructed at a cost of $500,000. A long-term note payable was used to pay for the cost.
f. $17,500 was paid for fencing around the new building. $55,000 was paid for paving the parking lot by the new building.
g. $20,000 was paid for lights in the new parking lot.
h. $10,000 was paid for a sprinkler system for the bushes and grass.
Required:
Prepare journal entries for the above transactions. Explanations are not required.