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Record the acquisition of the asset

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Question - Construction of Building: A building was constructed on land purchased last year at a cost of $150,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows.

Date Payment

2/1 $120,000

6/1 360,000

9/1 480,000

11/1 100,000

To finance construction of the building, a $600,000, 12% construction loan was taken out on -February 1. The loan was repaid on November 1. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8%.

Instructions - Record the acquisition of the asset.

Reference no: EM132616169

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