E7-18A. (Learning Objective 4: Measuring, depreciating, and reporting PPE) During 20X6, Cho Book Store paid $485,000 for land and built a store in Akron. Prior to construction, the city of Akron charged Cho $1,500 for a building permit, which Cho paid. Cho also paid $15,200 for architect’s fees. The construction cost of $670,000 was financed by a long-term note payable, with interest cost of $27,300 paid at completion of the project. The building was completed September 30, 20X6. Cho depreciates the building by the straight-line method over 35 years, with estimated residual value of $338,000.

1. Journalize transactions for:

a. Purchase of the land

b. All the costs chargeable to the building in a single entry

c. Depreciation on the building Explanations are not required.
2. Report Cho Book Store’s PPE on the company’s Balance Sheet at December 31, 20X6.
3. What will Cho’s Income Statement for the year ended December 31, 20X6, report for this situation?