Swifty Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $147,600 in cash. In addition, it paid $1,920 in surveying costs and $3,840 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.Date of Payment Amount of PaymentMarch 1 $259,200May 13 $32,400July $162,400The building was completed on July 1, 2018.To finance construction of this plant, Swifty borrowed $601,200 from the bank on December 1, 2017. Swifty had no other borrowings. The $601,200 was a 10-year loan bearing interest at 10%.Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018. (Please show how you calculated the solutions)December 31, 2017 December 31, 2018(a)Balance in Land Account(b)Balance in Building(c)Balance in Interest Expense
Recent Comments