Sleepy Ltd negotiated a purchase of land, building and equipment from Bambi Corp. The purchase was completed on June 28, 2021 at a total cash cost of $800,000. The estimated market value of each asset at the time was: land, $330,000; building, $520,000; and machinery, $150,000.

Required:

1. Prepare journal entries to record each of the purchase of the assets on June 28, 2021.

2. How much depreciation will be recorded for the December 31, 2021 year end assuming declining balance depreciation on the building over 40 years and 5 years on the machinery? Company policy is to start depreciating assets at the beginning of the month following acquisition.