A company purchased land with a building for a lump-sum cost of $2,570,000 ($500,000 paid in cash and the balance on a long-term note). It was estimated that the land and building had market values of $600,000 and $2,400,000, respectively.Determine the cost to be apportioned to the land and to the building and prepare the journal entry to record the acquisition.
What will be an ideal response?
| Asset | Appraised Value | ? | Percent of Total | Apportioned Cost |
| Land | $ 600,000 | /3,000,000 = | 20% | $ 514,000 |
| Building | 2,400,000 | /3,000,000 = | 80% | 2,056,000 |
| Total | $3,000,000 | ? | 100% | $2,570,000 |
| Land | 514,000 |
| Building | 2,056,000 |
| Cash | 500,000 |
| Long-Term Note Payable | 2,070,000 |
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