Sweet Company bought a building for $71,200 cash and the land on which it is located for $106,800 cash. The company paid transfer costs of $2,000. Renovation costs on the building were $21,200.

Required: 1. Give the journal entry to record the purchase of the property, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. 2. Compute straight-line depreciation at the end of one year, assuming an estimated 12-year useful life and a $14,000 estimated residual value. 3. What would be the net book value of the property at the end of year 2?