Sandhill Company purchased land and a building on April 1, 2019, for $390,000. The company paid...

    

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Sandhill Company purchased land and a building on April 1, 2019, for $390,000. The company paid $120,000 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $155,000 and the building. $235,000. The building was estimated to have a 25-year useful life with a $40,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 31 31 17 31 31 31 31 1 Recorded annual depreciation. Paid the interest owing on the note payable. Paid $275 to have the furnace cleaned and serviced. Recorded annual depreciation. Paid the interest owing on the note payable. The land and building were tested for impairment. The land had a recoverable amount of $125,000 and the building, $245,00 Sold the land and building for $330,000 cash: $120,000 for the land and $210,000 for the building. Paid the note payable and interest owing. Record the above transactions and adjustments, including the acquisition on April 1, 2019. (Hint: Any impairment loss for land is credited directly to the Land account.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, eg. 5,275) 2019 Date Apr. 1 Dec 31 Dec 31 v Account Titles and Explanation Land Building Notes Payable Cash (To record purchase of property) Depreciation Expense Accumulated Depreciation-Building (To record depreciation) Interest Expense Interest Payable (To record interest) D Debit 155,000 235,000 Credit 270,000 120,000 2020 Date Feb. 17 Y Dec. 31 v Dec. 31 Dec 31 v Dec. 31 2021 Account Titles and Explanation Building Cash (To record payment of furnace cleaning) Depreciation Expense Accumulated Depreciation-Building (To record depreciation) Interest Expense Interest Payable (To record interest) Impairment Loss Land (To record land impairment) Building 4 Impairment Loss (To record building impairment) Debit Credit Assume instead that the company sold the land and building on October 31, 2021, for $410,000 cash: $165,000 for the land and $245,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter o for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Oct. 31 Oct. 31 (To record depreciation expense.) (To record disposal.) eTextbook and Medial List of Accounts Debit -/30 E Credit Sandhill Company purchased land and a building on April 1, 2019, for $390,000. The company paid $120,000 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $155,000 and the building. $235,000. The building was estimated to have a 25-year useful life with a $40,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 31 31 17 31 31 31 31 1 Recorded annual depreciation. Paid the interest owing on the note payable. Paid $275 to have the furnace cleaned and serviced. Recorded annual depreciation. Paid the interest owing on the note payable. The land and building were tested for impairment. The land had a recoverable amount of $125,000 and the building, $245,00 Sold the land and building for $330,000 cash: $120,000 for the land and $210,000 for the building. Paid the note payable and interest owing. Record the above transactions and adjustments, including the acquisition on April 1, 2019. (Hint: Any impairment loss for land is credited directly to the Land account.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem. Round answers to 0 decimal places, eg. 5,275) 2019 Date Apr. 1 Dec 31 Dec 31 v Account Titles and Explanation Land Building Notes Payable Cash (To record purchase of property) Depreciation Expense Accumulated Depreciation-Building (To record depreciation) Interest Expense Interest Payable (To record interest) D Debit 155,000 235,000 Credit 270,000 120,000 2020 Date Feb. 17 Y Dec. 31 v Dec. 31 Dec 31 v Dec. 31 2021 Account Titles and Explanation Building Cash (To record payment of furnace cleaning) Depreciation Expense Accumulated Depreciation-Building (To record depreciation) Interest Expense Interest Payable (To record interest) Impairment Loss Land (To record land impairment) Building 4 Impairment Loss (To record building impairment) Debit Credit Assume instead that the company sold the land and building on October 31, 2021, for $410,000 cash: $165,000 for the land and $245,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select No Entry for the account titles and enter o for the amounts. Round answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Oct. 31 Oct. 31 (To record depreciation expense.) (To record disposal.) eTextbook and Medial List of Accounts Debit -/30 E Credit

Answer rating: 100% (QA)

Answer Date Particulars Debit Credit Apr01 Land 15500000 Building 23500000 Cash 12000000 5 Note Paya... View the full answer