record journal entries:

1.On May 2^nd. P³ acquired a storage facility and the lot adjacent to it. P³ plans to use one-half of the lot to store various equipment and will build an additional 20,000 square foot storage facility on the other half of the lot this year. The land is appraised at $2,500,000 and the storage building is appraised at $1,550,000. P³ spent $3,850,000 to buy the storage facility and lot. In addition, they paid $5,000 in back taxes on the storage facility, $1,000 in title search fees related to the land and $2,000 related the building; a lien of $7,000 was paid on the building as well. P³ spent $25,000 having the proper drainage installed on the part of the lot on which the new construction will occur. P³ uses straight-line depreciation for buildings and land improvements with a 20-year life for buildings and a 5-year life for land improvements.

2.Construction was begun on the new storage facility on June 1. The architect fees were $40,000. Construction is estimated to cost $5,000,000. P3 borrows $2,000,000 at 10% for the construction costs. P³'s other borrowings are $3,600,000 at 12% and $9,200,000 at 9%. The building will have an $80,000 residual value and a 20-life. Other facts regarding the constriction project are:

a.Costs for the month of June were $840,000. Assume construction costs are temporarily capitalized to Construction in Progress until completion of the project.

b.Construction costs for the month of July were $1,000,000

c.Construction expenditures in August were $2,300,000.

d.Construction expenditures in September were $860,000. The building was completed September 22^nd.

4.On June 8^th, P³ successfully defended a lawsuit on a patent they had acquired 2 years earlier. The current capitalized patent costs are $125,000. P³ amortizes patents over 8 years. $98,000 was spent defending the lawsuit.

5.On July 7^th, one of P³'s delivery vans was involved in an accident. The van had been originally purchased for $45,000, The van was being depreciated using the units of production method assuming a $3,000 residual value and total estimated miles of 200,000. Through 2018, the van had been driven 88,000 miles. In 2019, the van had been driven 19,000 miles. The van was a total loss after the accident. The insurance company paid $12,000 to P3.