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 $558,200, paying $149,700 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 9 15 17 28 building were $507,300 and $50,900, respectively. The old building will be demolished and a new apartment building will be constructed on the site. Paid legal fees of $11,080 on the real estate purchase of February 7 Paid $32,700 to demolish the old building and make the land ready for the construction of the apartment building Received $7,700 from the sale of material from the demolished building Paid $2,000 to grade the land in preparation for the construction of the apartment building Mar. 2 Paid architect fees of $37,130 to design the apartment building July 2 The full cost for construction of the apartment building was $1,370,400. Paid $337,300 cash and signed a bank loan payable for the balance. 3 Aug. 29 Purchased a one-year insurance policy on the finished building for $5,750 Paid $23,740 for the paving of sidewalks and a parking lot for the building

Explanation / Answer

Date Accounts title and explanations Debit $ Credit $ 7-Feb Land Account Dr. 558200     cash Account 149700      Mortage payable 408500 9-Feb land Account Dr. 11080       Cash Account 11080 15-Feb land Account Dr. 32700       Cash Account 32700 17-Feb Cash Account Dr. 7700       land account 7700 28-Feb land Account Dr. 2000     cash Account 2000 2-Mar Building Account Dr. 37130     cash Account 37130 2-Jul Building Account Dr. 1370400       cash Account 337300       bank Loan payable 1033100 3-Jul Insurance expense Dr. 5750      cash account 5750 29-Aug land Improvements Dr. 23740       cash Account 23740

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