Real Estate
Demolition of Existing Structure
Writing off an old building on purchased land that must be demolished before new construction.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Construction in Progress (CIP) | Asset (+) | 25,000.00 | - |
| Accumulated Depreciation (Old Building) | Contra-Asset (-) | 80,000.00 | - |
| Old Building (Cost) | Asset (-) | - | 100,000.00 |
| Cash / Bank (Demo Cost) | Asset (-) | - | 5,000.00 |
💡 Accountant's Note
The cost to demolish is capitalized into CIP because it is a necessary step to prepare the site. The old building's net book value is also transferred to CIP as part of the new project cost.
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