Record the acquisition of the building and land

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Question - A building was constructed on land purchased last year at a cost of $150,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows:

Feb. 1 $120,000

June 1 $360,000

September 1 $480,000

November 1 $100,000

Payment for Land:

Feb. 1 $150,000

To finance construction of the building, a $600,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8%.

Required - Record the acquisition of the building and land.

Reference no: EM132858995

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