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Item 2

Exercise 8-2 (Algo) Recording costs of assets LO C1

Cala Manufacturing purchases land for $489,000 as part of its plans to build a new plant. The company pays $33,400 to tear down an old building on the lot and $49,374 to fill and level the lot. It also pays construction costs of $1,292,200 for the new building and $81,568 for lighting and paving a parking area.

Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1