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Question - Honey Crisp Co needed a new building, and found a suitable piece of land which had an old building on it. Honey Crisp made an agreement to buy the land and the building for $860,000 cash. The old building was demolished to make way for the new building. The following is information regarding the demolishing of the old building and construction of the new one:
Cost of construction of new building, including $600,000 for a parking lot 5,260,000
Demolition of old building 150,000
Proceeds from salvage materials 20,000
Required - Create a single journal entry to record the above cost (assume paid cash).
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