The following expenditures relating to PPE assets were made by Sunny Ltd during the first 2 months of 2017: 

1. Paid $6000 of accrued land taxes at time factory site was acquired.

2. Paid $750 airconditioning on new delivery truck.

3. Paid $18 000 for parking lots and driveways on new factory site. 

4. Paid $900 for a 1-year accident insurance policy on new delivery truck.

5. Paid $350 to have company name and advertising slogan painted on new delivery truck.

6. Paid $7600 for installation of new factory machinery.

7. Paid $750 motor vehicle registration fee on new truck.

8. Paid $250 insurance to cover possible accident loss on new factory machinery while the machinery was in transit.

Required

(a) Explain the application of the cost principle in determining the acquisition cost of PPE assets.

(b) List the numbers of the foregoing transactions, and opposite each indicate the account name to which each expenditure should be debited.