On October 17, Nickle Company purchased a building and a plot of land for $589,200. The building was valued at $312,276 while the land carried a value of $276,924. Nickle paid $61,900 down in cash and signed a note payable for the balance. Write the journal entry.

The journal entry is shown below:

Building A/c Dr $312,276

Land A/c Dr $276,924

To Cash A/c $61,900

To Notes payable A/c $527,300

(Being the purchase of building and land for cash and note payable is recorded)

The computation of the notes payable is shown below:

= Total purchase value - cash paid

= $589,200 - $61,900

= $527,300