On January $1,$ Mitzu Company pays a lump$-$sum amount of $$2,600,000$ for land, Building $1,$ Building $2,$ and Land Improvements $1.$ Building $1$ has no value and will be demolished. Building $2$ will be an office and is appraised at $$793,000,$ with a useful life of $20$ years and a $$75,000$ salvage value. Land Improvements $1$ is valued at $$427,000$ and is expected to last another $14$ years with no salvage value. The land is valued at $$1,830,000.$ The company also incurs the following additional costs.

Cost to demolish Building $1$

Cost of additional land grading

Cost to construct Building $3,$ having a useful life of $25$ years and a $$398,000$ salvage value $,2,302,000$

Cost $of$ new Land Improvements $2,$ having $a20-$year useful life and $no$ salvage value $2,302,000$

$168,000$

Problem $8-3$A $($Algo$)$ Part $3$

$3.$ Using the straight$-$line method, prepare the December $31$ adjusting entries to record depreciation for the first year these assets were in use.

Journal entry worksheet

$1$

$2$

$3$

$4$

Record the year$-$end adjusting entry for the depreciation expense of Building $3.$

Note: Enter debits before credits.

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