Exercise_9-2.pptx - Exercise 9-2 Recording costs of real...

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Exercise 9-2 Recording costs of real estate Land versus building costs LO1
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After planning to build a new plant, Kallisto Backpack Manufacturing purchased a large lot on which a small building was located. The negotiated purchase price for this real estate was $1,200,000 for the lot plus $480,000 for the building. The company paid $75,000 to have the old building torn down and $105,000 for levelling the lot. Finally, it paid $2,880,000 in construction costs, which included the cost of a new building plus $215,000 for lighting and paving a parking lot next to the building. Present a single journal entry to record the costs incurred by Kallisto, all of which were paid in cash (assume a date of March 10, 2017, for your entry).
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