During 2018, lee's book store paid $ 273 comma 000 for land and built a store in columbus comma ohio. prior to construction, the city of columbus charged lee's $ 1 comma 300 for a building permit, which lee's paid. lee's also paid $ 15 comma 300 for architect's fees. the construction cost of $ 685 comma 000 was financed by a long-term note payable, with interest costs of $ 28 comma 220 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 $ 336 comma 000journalize transactions for the following: a. purchase of the land b. all the costs chargeable to the building in a single entry c. depreciation on the building for 2016

Explanation:

The journal entries are shown below:

1. Land A/c Dr $273,000

         To Cash A/c $273,000

(Being land is purchased for cash)

2. Building A/c Dr$729,820

        To Notes Payable  $685,000

        To Cash           $44,820        

(Being all cost are recorded)  

The computation of the cash is shown below

= ($1,300 + $15,300 + $28,220)

= $44,820

3. Depreciation Expenses A/c Dr $5,626

           To Accumulated Depreciation - Building A/c $5,626

(Being depreciation expenses is recorded)

The computation is shown below:

= (Cost - residual value) ÷ (useful life)

= ($729,820 - $336,000) ÷ (35 years)

= ($393,820) ÷ (35 years)  

= $11.252

The 6 months depreciation would be $5,626

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