Fred Graf, owner of Graf Interiors, is negotiating for the purchase of Terrell Galleries. The statement of financial position of Terrell is given in an abbreviated form below.

Graf and Terrell agree that:
1. Land is undervalued by \($50\),000.
2. Equipment is overvalued by \($5\),000.
Terrell agrees to sell the gallery to Graf for \($380\),000.
Instructions Prepare the entry to record the purchase of Terrell Galleries on Graf’s books.

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Assets Buildings (net) $200,000 TERRELL GALLERIES STATEMENT OF FINANCIAL POSITION AS OF DECEMBER 31, 2015 Equity and Liabilities Share capital-ordinary $200,000 Equipment (net) 175,000 Retained earnings 25,000 $225,000 Copyrights (net) 30,000 Accounts payable 50,000 Land 70,000 Long-term notes payable 300,000 Cash 100,000 Total liabilities 350,000 Total assets $575,000 Total equity and liabilities $575,000