Problem 8-3A Asset cost allocation; straight-line depreciation LO C1, P1 (Thank you so much)

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In January 2017, Mitzu Co. pays $2,750,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $590,000, with a useful life of 20 years and a $70,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $560,500 that are expected to last another 19 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,799,500. The company also incurs the following additional costs:

Cost to demolish Building 1	$	339,400
Cost of additional land grading		185,400
Cost to construct new building (Building 3), having a useful life of 25 years and a $398,000 salvage value		2,202,000
Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value		173,000

Problem 8-3A Part 3

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2017 when these assets were in use.

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

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31	Depreciation expenseBuilding 3
	Accumulated depreciationBuilding 3

Date	General Journal	Debit	Credit
Dec 31

ote: Enter debits before credits.

Date	General Journal	Debit	Credit
Dec 31