Problem 9-2A (Part Level Submission) For the year ended December 31, 2015, Westl

Question

Problem 9-2A (Part Level Submission) For the year ended December 31, 2015, Westlake Ltd. had the following transactions related to the purchase of property. Assume all transactions are for cash unless otherwise stated. Feb. 7 Purchased real estate for $534,600, paying $146,300 cash and signing a mortgage payable for the balance. The site had an old building on it and the fair values of the land and building were $473,800 and $60,800, respectively. The old building will be demolished and a new apartment building will be constructed on the site 9 Paid legal fees of $11,800 on the real estate purchase of February 7 15 Paid $30,200 to demolish the old building and make the land ready for the construction of the apartment building 17 Received $7,930 from the sale of material from the demolished building 28 Paid $2,000 to grade the land in preparation for the construction of the apartment building. Mar. 2 Paid architect fees of $37,450 to design the apartment building July 2 The full cost for construction of the apartment building was $1,314,900. Paid $339,500 cash and signed a bank loan payable for the balance 3 Aug. 29 Purchased a one-year insurance policy on the finished building for $5,340 Paid $24,670 for the paving of sidewalks and a parking ot for the building. Record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Ir no entry is required, select·No Entry-for the account titles and enter O for the amounts.

Explanation / Answer

Date Accounts title and explanations Debit $ Credit $ 7-Feb Land Dr. 534600      Cash 146300       Mortgage payable 388300 9-Feb Land Dr. 11800       Cash 11800 15-Feb Land Dr. 30,200       Cash 30,200 17-Feb Ccash Account Dr. 7930     land 7930 28-Feb Land Dr. 2000       Cash 2000 2-Mar Building Account Dr. 37450       cash Account 37450 2-Jul Building Account Dr. 1314900      Cash Account 339500       Bank loan payable 975400 3-Jul Insurance expense Dr. 5340      Cash Account 5340 29-Aug land improvements Dr. 24670      Cash 24670

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