On October 1, 20X1, Gamma Corporation acquired a building for $500,000 cash. The building has a useful life of 25 years and a residual value of $50,000. Calculate the depreciation expense for the year 20X1 using the straight-line method.

Additionally, Gamma Corporation made the following transactions during 20X1:

• December 1: Paid $20,000 for building renovations.

Required:

• Calculate the total depreciation expense for the year 20X1.
• Prepare journal entries for the building-related transactions.