Purchased land and an office building for $140,000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes.)I need to know how to record the transaction in a general journal.

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Asked Nov 21, 2019
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Purchased land and an office building for $140,000, of which $20,000 was attributable to the fair market value of the land. A $50,000 cash down payment was made and a 5% five-year note was signed for the balance. Interest and 20% of the principal will be paid annually on this date. (Assume a 360-day year for interest computation purposes.)

I need to know how to record the transaction in a general journal.

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Step 1

Prepare journal entry ...

Account Title and Explanation
Date
Post
Debit
Credit
Ref
(S)
20,000
(S)
Land
Building
Notes payable
120,000
90,000
Cash
50,000
(To record the purchase of land and
building for cash and singing a 5%
five-year note)
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Account Title and Explanation Date Post Debit Credit Ref (S) 20,000 (S) Land Building Notes payable 120,000 90,000 Cash 50,000 (To record the purchase of land and building for cash and singing a 5% five-year note)

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