1.) How would you journalize this entry?
June 10
Table Co. Purchased a building and the land it is on for 160,000 in order to store table equipment. The lot on which the building is located is valued at 40,000. The balance of the cost is to be allocated to the building. Table Co. Made a cash down payment of 12,100 and executed a mortgage for the balance. The mortgage can be paid (payable) in 8 equal annual installments beginning July 1st.
-I would say DR Office Equipment 40,000 and CR Cash for 12,100 but I'm unsure.
2.) How would you adjust the entry based on the question above considering the info below:
The annual interest on the mortgage payable was 8.00 percent. Interest expense for one-half month should be computed because the building and land were purchased and the liability incurred on June 10.
Read more: How would you Journalize and Adjust these entries?
