At January 1, 2017, Jaina Company, a public company, reported the following property, plant, and equipment accounts:

Accumulated depreciation-buildings..............$12,100,000

Accumulated depreciation-equipment..............15,000,000

Building...................................................28,500,000

Equipment................................................48,000,000

Land........................................................4,000,000

Jaina uses straight-line depreciation for buildings and equipment, and its fiscal year end is December 31. The buildings are estimated to have a 50-year life and no residual value; the equipment is estimated to have a 10-year useful life and no residual value. Interest on all notes is payable or collectible at maturity on the anniversary date of the issue.

During 2017, the following selected transactions occurred:

Apr. 1 Purchased land for S1.9 million. Paid 5475,000 cash and issued a 10-year, 6% note for the balance.

May 1 Sold equipment that cost 5750,000 when purchased on January 1, 2010. The equipment was sold for $350,000 cash.

June I Sold land purchased on June 1, 1996, for 51.2 million. Received 5380,000 cash and accepted a 6% note for the balance. The land cost $300,000.

July 1 Purchased equipment for $l million on account, terms n160.

Dec. 31 Retired equipment that cost 5470,000 when purchased on December 31, 2010.

Instructions

(a) Record the above transactions.

(b) Record any adjusting entries required at December 31, 2017, and update account balances. (c) Preparetheproperty,plant,andequipmentsectionofJaina'sbalancesheetatDecember31,2017.

Taking It Further

Why do most companies use the cost model instead of the revaluation model to account for property, plant, and equipment?