Windsor Landscaping began construction of a new plant on December 1, 2017. On th

Question

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

(b) Balance in Building

(c) Balance in Interest Expense

Explanation / Answer

Working:

Dec.31, Dec.31, 2017 2018 Balance in Land account 154560 154560 Balance in building account 0 716964 Balance in interest expense 0

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