At January 1, 2017, Youngstown Company reported the following property, plant, and equipment
Accumulated depreciation—buildings$ 62,200,000
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:
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.
(a) Record the above transactions