For the year ended December 31 2018 Oriole Ltd had the follo

For the year ended December 31, 2018, Oriole 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 $1.1 million, paying $311,000 cash and signing a mortgage payable for the balance. The site had an old building on it and the current values of the land and building were $1 million and $101,200, respectively. The old building will be demolished and a new apartment building will be constructed on the site 9 Paid legal fees of $21,930 on the real estate purchase of February 7 Paid $62,790 to demolish the old building and make the land ready for the construction of the apartment building Received $15,920 from the sale of material from the demolished building Paid $4,000 to grade the land in preparation for the construction of the apartment building Paid architect fees of $78,740 to design the apartment building The full cost for construction of the apartment building was $2.7 million. Paid $742,570 cash and signed a bank loan payable for the balance Purchased a one-year insurance policy on the finished building for $9,380 Paid $47,840 for the paving of sidewalks and a parking lot for the building 15 16 28 Mar. 2 July 2 3 Aug. 29

Solution

Journal Entries :-

Date	Particulars	Debit($)	Credit($)
Feb 7, 2018	Land A/c Dr.	1100000
	To Cash a/c		311000
	To Mortgage Payable		789000
Feb 9, 2018	Land A/c Dr.	21930
	To Cash A/c		21930
	(Legal fees paid on purechase)
Feb 15, 2018	Land A/c Dr.	62790
	To Cash A/c		62790
	(To record amount paid to demolish old building on land)
Feb 16, 2018	Cash a/c Dr.	15920
	To Land a/c		15920
	(To recored amount receive from building scrap)
Feb 28	Building A/c Dr.	4000
	To Cash A/c		4000
	(Amount Paid for grading Land)
Mar 2, 2018	Building A/c Dr.	78740
	To Cash A/c		78740
	(To recored payment to architect for design)
Jul 2, 2018	Building A/c Dr.	1309400
	To Cash A/c		351700
	To Bank Loan A/c		957700
	(Amount Paid for Building)
Jul 3, 2018	Building A/c Dr.	9380
	To Cash A/c		9380
	(To Recored Insurance for new building)
Aug 29, 2018	Land Improvements A/c Dr.	47840
	To Cash A/c		47840
	(To Recored Payment for sidewalks and parking)