#1.Stargazer Company was incorporated on January 1, 2015 but was unable to begin manufacturing activities until July 1, 2015, because new factory facilities were not completed until that date. The Land and Building account reported the following items during 2015:

January 31 Land and buildings $160,000

February 28 Cost of removal of building 9,800

May 1 Partial payment of new construction 60,000

May 1 Legal fees paid 3,770

June 1 Second payment on new construction40,000

June 1 Insurance premium 2,280

June 1 Special tax assessment 4,000

June 30 General expenses 36,300

July 1 Final payment on new construction 30,000

December 31 Asset write up 53,800

399,950

December 31 Depreciation 2015 at 1% (4,000)

December 31, 2015 Account balance 395,950

The following additional information is to be considered:

To acquire land and building, the company paid $80,000 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $117 per share.

Cost of removal of old buildings amounted to $9,800, and the demolition company retained all materials of the building.

Legal fees covered the following:

Cost of organization $610

Examination of title covering purchase of land 1,300

Legal work in connection with construction contract 1,860

Insurance premium covered the building for a 2 year term beginning May 1, 2015.

The special tax assessment covered street improvements that are permanent in nature.

General expenses covered the following for the period from Jan 1 to June 30, 2015.

Presidents salary $32,100

Plant superintendents salary supervision of new building 4,200

Because of a general increase in construction costs after entering into the building contract, the board of directors increased the value of the building $53,800, believing that such an increase was justified to reflect the current market at the time the building was completed. Retained earnings was credited for this amount.

Estimated life of building 50 years. Depreciation for 2015 1% of asset value (1% of $400,000 or $4,000)

Provide entries to reflect correct land, buildings and depreciation accounts at December 31, 2015. I would recommend you show detailed calculations to receive partial credit.