In January 2013, Mitzu Co. pays $2,650,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $826,000, with a useful life of 20 years and an $90,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $324,500 that are expected to last another 11 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,799,500. The company also incurs the following additional costs:
Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2013.