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Exercise 8-2 Recording costs of assets LO C1

Cala Manufacturing purchases a large lot on which an old building is located as part of its plans to build a new plant. The negotiated purchase price is $238,000 for the lot plus $133,000 for the old building. The company pays $29,500 to tear down the old building and $43,609 to fill and level the lot. It also pays a total of $1,437,768 in construction coststhis amount consists of $1,352,400 for the new building and $85,368 for lighting and paving a parking area next to the building.

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