LaSalle Company purchased a building in 2011 at a cost of $5,000,000. The company previously purchased the land on which the building is located, so the entire purchase price was allocated to the building account and none was allocated to land. At the time of purchase, the estimated useful life of the building was 25 years. The company depreciates the building on a straight-line basis and has chosen to record a full year of depreciation in the year of acquisition, and none in the year of disposal. 

It is now 2021. LaSalle has found it necessary to replace all of the windows in this building at a cost of $800,000. Upon further review, management concluded that the windows should have been recorded as a separate component because, as of 2011, their useful lives did not extend for 25 years—the manufacturer’s specifications indicate that the windows would be expected to remain in functioning condition until 2021. The estimated value of the windows when the building was purchased was $600,000.

Required:

a. Prepare the journal entry to record the replacement of the windows assuming that the windows were recorded as a separate component. 

b. Assume that LaSalle committed an error in not componentizing the windows separately from the building. Record the adjusting journal entry or entries required to correct this error. 

c. Prepare the journal entry to record the replacement of the windows after having properly recorded the windows as a separate component in part (b). 

d. Assume retained earnings at the beginning of 2021 were $9,000,000. With the retrospective componentization of the building and windows, by how much did the following amounts change in 2021: opening retained earnings, income, and closing retained earnings?