House Builders of Canada decided to expand its facilities and upgrade some of its log preparation equipment. The following events occurred during the year:

Required:
a. Determine the costs that should be capitalized as assets by Home Builders of Canada in its land, buildings, and equipment accounts.
b. State what should be done with any of the costs that are not capitalized.
c. If Home Builders of Canada borrowed money to finance the expansion, what two options would it have regarding the interest cost?

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Description of Expenditure Purchased land adjacent to the company's existing property, to be used for the expansion Date Amount Jan. 2 $ 75,000 1,200 Paid legal fees and deed registration fees 4,000 Paid its workers to clear the land on their days off. 20,000 Purchased equipment, which was delivered but not yet paid for 6 5 1 17 20 2,500 Constructed temporary fencing as required by the building permit to Purchased building pemit for construction of the addition enclose the construction site Upon completion of the addition to the building, the fencing was to be removed. Construction of a new addition to the main building was started. 22 400,000 25 3,500 ived bill for delivery of the equipment that was received on January 15 811,000 Paid architect's fees for designing the building addition and supervising May 9 seo 000 hail full amount to the construction company upon completion of the 500 Sold fence materials to the construction company, reducing the net cost Feb. I Paid the amounts owing on the equipment and its delivery its construction 800 Paid cost to remove temporary fencing. 14 24 2,500 1,200 to Home Builders of Canada Paid work crews to install the equipment Paid for party to celebrate the successful completion of the expansion. 00 Paid for set-up and adjustment of the new equipment so it would be ready ine to use 10 r an ad in the local paper to advertise that the company was hiring