On April 30, 2021, JP's Aquariums purchased a new location. The purchase included the following assets: land,
Question:
On April 30, 2021, JP's Aquariums purchased a new location. The purchase included the following assets: land, two buildings, and a vehicle An appraiser estimated the fair market value of the land, building, and the vehicle to be $2,000,000, $600,000, $250,000, respectively. The purchase price was $2,700,000 plus 3% commission to the real estate agent for assisting in the purchase of all assets, $22,000 in back taxes on the building, and $12,500 in attorney's fees In addition to the previous amounts paid for in cash, JP's Aquariums assumed a mortgage of $220,000 on the land. Lastly, JP's Aquariums spent $18,500 to demolish an old building on the land and to dispose of the related scrap.
Record the journal entry on April 30, 2021, to record the purchase of the assets.
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman