Pharoah Company purchased real estate for $1,200,000, which included $3,500 in legal fees. It paid $260,000 cash and incurred a mortgage payable for the balance. The real estate included land that was appraised at $471,800, a building appraised at $754,880, and fences and other land improvements appraised at $121,320. The building has an estimated useful life of 60 years and a $54,000 residual value. Land improvements have an estimated 15-year useful life and no residual value.

Record the purchase of the real estate

Record the purchase of the real estate. (Credit account titles are automatically indented when entry is required, select "No Entry" for the account titles and enter o for the amounts. Rou Account Titles and Explanation Debit Credit (To record purchase of property.)