Journal Entries for Plant Assets During the first few days of the year, Coast Company entered into the following transactions: Purchased a parcel of land with a building on it for $1,080,000 cash. The building, which will be used in operations, has an estimated useful life of 25 years and a salvage value of $72,000. The 1 assessed valuations for property tax purposes show the land at $96,000 and the building at $864,000. 2 Paid $36,000 for the construction of an asphalt parking lot for customers. The parking lot is expected to last 12 years and has no salvage value. 3 Paid $30,000 for the construction of a new entrance to the building. Purchased store equipment, paying the invoice price (including seven percent sales tax) of $89,880 in cash. The estimated useful life of the equipment is eight years, and the salvage value is 4 $8,640. 5 Paid $264 freight on the new equipment. 6 Paid $1,800 to repair damages to floor caused when the store equipment was accidentally dropped as it was moved into place. 7 Paid $48 for an umbrella holder to place inside front door (customers may place wet umbrellas in the holder). The holder is expected to last 20 years. Required a. Prepare journal entries to record these transactions. Credit Debit 108,000 972,000 0 900,000 36,000 0 36,000 30,000 30,000 General Journal Date Description Land Building Cash To record purchase of land and building. Land Improvements - Parking Lot Cash To record cost of parking lot. 3 Building Cash To record cost of new building entrance. 4 Store Equipment Cash To record purchase of store equipment. Store Equipment Cash To record freight payment on store equipment. 6 Repairs Expense Cash To record payment to repair damaged floor. Miscellaneous Expense Cash To record purchase of umbrella holder. 89,880 0 89,880 0 264 0 264 1,800 0 48 b. Prepare the December 31 journal entries to record depreciation expense for the year. Double-declining balance depreciation is used for the equipment, and straight-line depreciation is used for the building and parking lot. General Journal Description Debit Credit Date Dec.31 0 To record depreciation on building. Dec.31 To record depreciation on parking lot. Dec.31 To record depreciation on store equipment