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On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 for land, Building 1,...

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Accounting

On January 1, Mitzu Company pays a lump-sum amount of $2,800,000 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 $678,500, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $560,500 and is expected to last another 19 years with no salvage value. The land is valued at $1,711,000. The company also incurs the following additional costs.
Cost to demolish Building 1 $ 341,400
Cost of additional land grading 185,400
Cost to construct Building 3, having a useful life of 25 years and a $398,000 salvage value 2,222,000
Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 173,000
2. Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1.

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