Land
Definition: Not depreciated
Scope:ModerateDifficulty:Very Easy
Not depreciated
Common Journal Entries
| Account | Debit | Credit |
|---|---|---|
| 1. Purchase land | ||
| Buy land for $150,000 cash. | ||
| LandAsset+ | $150,000 | |
| CashAsset− | $150,000 | |
| Land is not depreciated—indefinite useful life. | ||
| 2. Sell land at a gain | ||
| Sell for $180,000; cost was $150,000. | ||
| CashAsset+ | $180,000 | |
| LandAsset− | $150,000 | |
| Gain on Sale of LandRevenue+ | $30,000 | |
| Gain = proceeds − carrying value. | ||
T-AccountsA visual representation of a ledger account shaped like the letter T. Left side shows debits, right side shows credits.
LandLandAssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$150,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$150,000.00
$0.00
CashAsset account. Debits increase the balance. Credits decrease the balance.AssetA resource owned by the business. Normal balance: debit. Debits increase, credits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
$180,000.00
◀ Normal bal.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$150,000.00
$30,000.00
Gain on Sale of LandGain on Sale of LandRevenueIncome earned from business operations. Normal balance: credit. Credits increase, debits decrease.
DebitLeft side of a journal entry. Increases assets and expenses. Decreases liabilities, equity, and revenue.
CreditRight side of a journal entry. Increases liabilities, equity, and revenue. Decreases assets and expenses.
$30,000.00
Normal bal. ▶
$30,000.00
DurationLong-Term
External Links
- Real property — Wikipedia