Question

Crane Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $145,200 in cash. In addition, it paid $2,400 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, 2020, when the architect was paid $31,200. 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 2021 as follows.

Date of Payment		Amount of Payment
March 1		$243,600
May 1		334,800
July 1		64,800

The building was completed on July 1, 2021.

To finance construction of this plant, Crane borrowed $612,000 from the bank on December 1, 2020. Crane had no other borrowings. The $612,000 was a 10-year loan bearing interest at 8%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

				December 31, 2020		December 31, 2021
(a)		Balance in Land Account
(b)		Balance in Building
(c)		Balance in Interest Expense

Answer 1