Question

Please help. The requirements are the questions. Thanks.

During 2018, Lee's Book Store paid $489,000 for land and built a store in Cleveland, Ohio. Prior to construction, the city of Cleveland charged Lee's $1,800 for a building permit, which Lee's paid. Lee's also paid $15,800 for architect's fees. The construction cost of $710,000 was financed by a long-term note payable, with interest costs of $30,180 paid at the completion of the project. The building was completed June 30, 2018. Lee's depreciates the building using the straight-line method over 35 years, with estimated residual value of $341,000. Read the requirements. A Requirements - X All the costs chargeable to the building in a single ournal entries.) 1. Journalize transactions for the following (explanations are not required): a. Purchase of the land b. All the costs chargeable to the building in a single entry c. Depreciation on the building for 2018 2. Report Lee's plant assets on the company's balance sheet at December 31, 2018 3. What will Lee's income statement for the year ended December 31, 2018, report for these facts?

Answer 1

1. Journalize transactions for the following:	Debit	Credit
a)
Land	$489,000
Cash		$489,000
b)
Building	$757,780
Notes Payables		$710,000
Cash ($1800+$15,800+$30180)		$47,780
c)
Depreciation Expenses ($757,780 - $341000)/35years x 6/12 months	$5,954
Accumulated Depreciation - Building		$5,954
2)
Book Store's plant assets on the company's balance sheet at December 31, 2016
Plant Assets
Buildings	$757,780
Less: Accumulated Depreciation - Building	-$5,954
Net Building	$751,826
3)
Income Statement
Depreciation Expenses	$5,954