Question
In: Accounting
Tolson Company purchased a building by paying $85,000. The building has an estimated life of 40...
Tolson Company purchased a building by paying $85,000. The building has an estimated life of 40 years and an estimated residual value of $5,000.
Required:
| Prepare journal entries to record the purchase and the related year-end adjusting entry. |
Solutions
Expert Solution
| Journal entries | ||||
| Transaction | ACCOUNT TITLES AND EXPLANATIONS | DEBIT ($) | CREDIT ($) | |
| 1 | Building | 85,000.00 | ||
| Cash | 85,000.00 | |||
| (Being building purchased for cash) | ||||
| 2 | Depreciation Expense of Building | 2,000.00 | ||
| Building | 2,000.00 | |||
| (To record depreciation on building) | ||||
| Explanation | ||||
| Depreciation Expense of Building = ($85,000-$5,000) / 40 | ||||
| = $2,000 | ||||
ekkarill92 answered 1 year agoRelated Solutions
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