Crane Company purchased land and a building on April 1, 2019, for $351,600. The company paid $102,000 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $136,000 and the building, $215,600. The building was estimated to have a 25-year useful life with a $30,500 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is calculated to the nearest month. The following are related transactions and adjustments during the next three years. 2019 Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 2020 Feb. 17 Paid $180 to have the furnace cleaned and serviced. Dec. 31 Recorded annual depreciation. 31 Paid the interest owing on the note payable. 31 The land and building were tested for impairment. The land had a recoverable amount of $107,900 and the building, $226,000. 2021 Jan. 31 Sold the land and building for $292,000 cash: $101,000 for the land and $191,000 for the building. Feb. 1 Paid the note payable and interest owing. Date Apr. 1 Account Titles and Explanation Debit Credit Land 136.000 l Building 215.600 l Cash 102.000 Notes Payable 249.600 (T 0 record purchase of property) Dec. 31 V, Depreciation Expense 5.553 I Accumulated Depreciation - Building 5.553 (To record depreciation) Dec. 31 V, Interest Expense 9.360 I 2020 Date Cash 9.360 (T 0 record interest) Account Titles and Explanation Debit Credit Feb. 17 V, Repairs Expense 180 l Cash 180 (T 0 record payment of furnace cleaning) Dec. 31 V, Depreciation Expense 7.404 I Accumulated Depreciation - Building 7.404 (To record depreciation) Dec. 31 V, Interest Expense 12.480 l Dec. 31 v Impairment Loss 28,100 Land 28,100 (To record land impairment) Dec. 31 No Entry 0 No Entry 0 (To record building impairment) 2021 Date Account Titles and Explanation Debit Credit Jan. 31 v Depreciation Expense 617 Accumulated Depreciation - Building 617 (To record depreciation) Jan. 31 Cash 292,000 Accumulated Depreciation - Building 13,574 Loss on Disposal 17,926 Building 215,600 Land 107,900 (To record disposal) Feb. 1 Interest Expense 1,040 Notes Payable 249,600 Cash 250,640 (To record payment of note)Assume instead that the company sold the land and building on October 31, 2021, for $372,000 cash: $146,000 for the land and $226,000 for the building. Prepare the journal entries to record the sale. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. if no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e3. 5,275.) Date Account Titles and Explanation Debit Credit Oct. 31 l (To record depreciation expense.) Oct. 31 l (To record disposal.)
