Homework SourseSpice World Corporation purchased for 180000 cash the follow
Spice World Corporation purchased for $180,000 cash the following assets: land with a fair value of $60,000, a building with a fair value of $90,000, equipment with a fair value of $35,000 and inventory with a fair value of $15,000.
Prepare the appropriate journal entry for Spice World’s purchase.
Solution
Prepare the appropriate journal entry for Spice World’s purchase.
| Date | accounts & explanation | debit | credit |
| Land (180000*60000/200000) | 54000 | ||
| Building (180000*90000/200000) | 81000 | ||
| equipment (180000*35000/200000) | 31500 | ||
| Inventory (180000*15000/200000) | 13500 | ||
| Cash a/c | 180000 | ||
| (To record purchase the assets) | |||
