How company should record the land


Response to the following questions:

1. Billy Jessop is the owner of Valley Delivery Service. Recently, Billy paid interest of $6,000 on a personal loan of $75,000 that he used to begin the business. Should Valley Delivery Service record the interest payment? Explain.

2. On October 1, Wok Repair Service extended an offer of $100,000 for land that had been priced for sale at $150,000. On December 19, Wok Repair Service accepted the seller's counteroffer of $110,000. Describe how Wok Repair Service should record the land.

 

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Cost Accounting: How company should record the land
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