During Year 4, a firm purchased land, building, and equipment for a lump sum payment of $450,000. In connection with this acquisition, the firm also incurred legal fees of $5,000, accounting fees of $5,000, real estate transfer taxes on the building of $10,000, building inspection fee of $2,000, and appraisal costs of $10,000. The appraisal established the value of the land at $100,000, the value of the building at $300,000, and the value of the equipment at $100,000. All the costs have been accumulated in a temporary account titled "Site Acquisition Costs."
Prepare the journal entry to record the acquisition of the property and the related fees.© BrainMass Inc. brainmass.com July 16, 2018, 10:49 am ad1c9bdddf
The lumpsum cost would be the cash paid plus legal fee, accounting fee and appraisal cost.
The lump sum costs will be 450,000+5,000+5,000+10,000= 470,000.
The building costs would be added to building (real estate transfer fee on ...
The solution explains the journal entry for acquisition of the property and the related fees