On January 1, Tolson Company purchased a building by paying $50,000. The building has an estimated...

On January 1, Tolson Company purchased a building by paying $50,000. The building has an estimated life of 40 years and an estimated residual value of $10,000.

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	$50,000.00
	Cash		$50,000.00
	(Being building purchased for cash)

2	Depreciation Expense of Building	$1,000.00
	Building		$1,000.00
	(To record depreciation on building)


	Explanation
	Depreciation Expense of Building = ($50,000-$10,000) / 40
	= $1,000

ekkarill92 answered 1 year ago

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