On January 1, TT 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 $660,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $510,000 and is expected to last another 17 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	$	346,400
Cost of additional land grading		185,400
Cost to construct Building 3, having a useful life of 25 years and a $402,000 salvage value		2,262,000
Cost of new Land Improvements 2 having a 20-year useful life and no salvage value		168,000

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

Record the cost of the plant assets, paid in cash.

Date	General Journal	Debit	Credit
Jan 01

1B. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the first year these assets were in use.

Record the year-end adjusting entry for the depreciation expense of building 2, building 3, land improvements 1, and land improvements 2.

Date	General Journal	Debit	Credit
Dec 31