Question

Prepare the journal entries for Pine to record the above transactions and​ events, as well as any related​ year-end adjusting entries. Ignore income taxes. ​(Record debits​ first, then credits. Explanations are not​ required.) a. In December 2018​, Kay​, the owner of Pine​, paid for a parcel of land along with a warehouse on behalf of Pine​, the registered owner of the​ property, for a total cost of $ 1 comma 400 comma 000. Kay also paid a real estate commission of $ 25 comma 000 and legal fees of $ 10 comma 000 in connection with this​ purchase, plus $ 10 comma 000 for the demolition of the warehouse. Pine will reimburse Kay for these costs in January  2019 and will begin construction of an office building on this land. Prior to the​ purchase, the land and warehouse were appraised at $ 1 comma 100 comma 000 and $ 300 comma 000​, respectively.

a.Prepare the entry to show the December 2018 purchase.

b. On December​ 31, 2018​, Pine and Ash Corp. exchanged equipment. The exchange met the test for commercial substance for accounting purposes. Prepare a compound entry to show the exchange of equipment.

c.On October​ 1, 2018​, Pine purchased some land by signing a five​-year ​non-interest-bearing note payable for $ 900 comma 000. Pine pays interest at the rate of 15 % on other loans and was pleased to get a​ non-interest-bearing note payable on this deal. ​(Use a financial calculator and round your final answer to the nearest​ dollar.)

Answer 1