$4$

Part $2$ of $3$

$9$

Required information

$[$The following information applies to the questions displayed below.$]$

On January $1,$ Mitzu Company pays a lump$-$sum amount of $$2,800,000$ for land, Building $1,$ Building $2,$ and Land Improvements $1.$ Building $1$ has no value and will be demolished. Building $2$ will be an office and is appraised at $$649,000,$ with a useful life of $20$ years and a $$80,000$ salvage value. Land Improvements $1$ is valued at $$472,000$ and is expected to last another $16$ years with no salvage value. The land is valued at $$1,829,000.$ The company also incurs the following additional costs.

Cost to demolish Building $1$

$$342,400$

Cost of additional land grading

$189,400$

Cost to construct Building $3,$ having a useful life of $25$ years and a $$400,000$ salvage value

Cost of new Land Improvements $2,$ having a $20-$year useful life and no salvage value

$2,282,000$

$173,000$

Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January $1.$

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View journal entry worksheet

$\backslash$table$[[$No$,$Date,General Journal,Debit,Credit$],[1,$January $01,$Land,,$],[,,$Building $2,,],[,$Building $3,,,],[,,$Land improvements $1,173,000,],[,,$Land improvements $2,,],[,$Cash,,,$]]$