Shahia Company bought a building for $75,000 cash and the land on which it was located for $110,000 cash. The company paid transfer costs of $16,000 ($6,000 for the building and $10,000 for the land). Renovation costs on the building were $31,000.

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Section BreakE8-3 Computing and Recording Cost and Depreciation of Assets (Straight-Line Depreciation) LO8-2, 8-3

1.

value: 11.11 points

Required information

E8-3 Part 1

Required:

1. Prepare the journal entry to record the purchase of the property, including all relevant expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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eBook & Resources

Hint #1

Check my work

2.

value: 11.11 points

Required information

E8-3 Part 2

2. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $11,000 estimated residual value.

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eBook & Resources

Hint #1

Check my work

3.

value: 11.11 points

Required information

E8-3 Part 3

3. What would be the net book value of the property (land and building) at the end of year 2? (Amounts to be deducted should be indicated by a minus sign.)