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Question

At January 1, 2017, Youngstown Company reported the following property, plant, and equipment

accounts:

Accumulated depreciation—buildings$ 62,200,000

Accumulated depreciation—equipment54,000,000

Buildings97,400,000

Equipment150,000,000

Land20,000,000

The company uses straight‐line depreciation for buildings and equipment, its year‐end is December 31, and it makes adjusting entries annually. The buildings are estimated to have a 40‐year useful life and no salvage value; the equipment is estimated to have a 10‐year useful life and no salvage value.

During 2017, the following selected transactions occurred:

Apr.1

Purchased land for $4.4 million. Paid $1.1 million cash and issued a 3‐year, 6% note payable for the balance. Interest on the note is payable annually each April 1.May1

Sold equipment for $300,000 cash. The equipment cost $2.8 million when originally purchased on January 1, 2009.June1

Sold land for $3.6 million. Received $900,000 cash and accepted a 3‐year, 5% note for the balance. The land cost $1.4 million when purchased on June 1, 2011. Interest on the note is due annually each June 1.July1

Purchased equipment for $2.2 million cash.Dec.31

Retired equipment that cost $1 million when purchased on December 31, 2007. No proceeds were received.

Instructions

(a) Record the above transactions

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