Bridges Wholesale Company incurred the following costs in 2011 for a warehouse acquired on July 1, 2011, the beginning of its fiscal year:

Cost of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $132,000

Cost of building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 528,000

Remodeling and repairs prior to occupancy . . . . . . . . . . . . . . . . . . . . . 58,200

Escrow fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000

Landscaping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000

Property tax for period prior to acquisition . . . . . . . . . . . . . . . . . . . . . . 10,000

Real estate commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000

The company signed a non-interest-bearing note for $600,000 (20 _ $30,000) on July 1, 2011. The implicit interest rate is 12% compounded semiannually. Payments of $30,000 are to be made semiannually beginning December 31, 2011, for 10 years.

Instructions:

Give the required journal entries to record (1) the acquisition of the land and building (assume that cash is paid to equalize the cost of the assets and the present value of the note) and (2) the first two semiannual payments, including amortization of note discount.