# What is the journal entry to record an asset purchase that includes both land and equipment?

The key thing to understand is that the total purchase price is allocated between land and equipment based on the appraisal value from the bank. As you can see in the visual below, the total was appraisal value from the bank was \$800.

So, for land, we would divide \$300/\$800, which equals 37.5%, and multiply by the purchase price of \$1,000. For buildings, we would divide \$500/\$800, which equals 62.5%, and multiply by the purchase price of \$1,000

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