Yes, add it to your tax return. Then after you enter the 1099-R, you will be asked a series of questions, one of which will be what did you do with this money?
Here you will answer that you rolled it over. Then continue through the questions and it will be reported but not included as taxable income.
Yes, the was the correct code for the distributing company to use. And you do not need a 1099-R for the one you put it into until you receive a distribution.