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  3. on january 1, mitzu company pays a lump-sum amount

On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1,...

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Accounting

On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $767,000, with a useful life of 20 years and a $80,000 salvage value. Land Improvements 1 is valued at $383,500 and is expected to last another 13 years with no salvage value. The land is valued at $1,799,500. The company also incurs the following additional costs.
Cost to demolish Building 1
Cost of additional land grading
Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 2,282,000
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value
$346,400
193,400
2,282,000
173,000
2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.
Journal entry worksheet
1
Record the cost of the plant assets, paid in cash.
Note: Enter debits before credits.
\table[[Date,General Journal,Debit,Credit],[January 01,Land,,],[,Building 2,,],[,Building 3,,],[,Land improvements 1,,],[,Land improvements 2,,],[,Lram,,]]
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