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On July 0 1 , 2 0 2 3 , Chargers Properties Ltd . purchased a recently built apartment complex for a total acquisition cost
On July Chargers Properties Ltd purchased a recently built apartment complex for a total acquisition cost of $ paid by cash. The building has an estimated useful life of years and was constructed with a large efficient boiler that is expected to last for years. Management believes that the quality of the shingles used on the roof was substandard and estimates that the roof will need to be replaced in years. The fiscal yearend for the company is December and management prefers to capitalize the boiler, roof, and the building into components where possible. Depreciation is taken for the portion of the year the assets are used.
Instructions:
Assume the following is the breakdown of the acquisition price: boiler is of the total, roof is of the total and the remaining is allocated to the building.
a What would be the journal entries to record the acquisition of the apartment complex on July st
b What would be the applicable entries at yearend?
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