Windsor Landscaping began construction of a new plant on Dec
Windsor Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $145,200 in cash. In addition, it paid $2,640 in surveying costs and $4,080 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $720 being received from the sale of materials.
Architectural plans were also formalized on December 1, 2017, when the architect was paid $33,600. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.
| December 31, 2017 | December 31, 2018 | |||||
| (a) | Balance in Land Account |
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| (b) | Balance in Building |
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| (c) | Balance in Interest Expense |
Solution
Working:
| Dec.31, | Dec.31, | |
| 2017 | 2018 | |
| Balance in Land account | 154560 | 154560 |
| Balance in building account | 0 | 716964 |
| Balance in interest expense | 0 |
