Construction of Building

A building was constructed on land that was purchased January 1 at a cost of $150,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows:

Date Payment

Feb. 1 $120,000

June 1 360,000

Sept. 1 480,000

Nov. 1 100,000

To finance construction of the building, a $600,000, 12% construction loan was taken out on February 1. At the beginning of the project, Hayes invested the portion of the construction loan that was not yet expended and earned investment income of $4,600. The loan was repaid on November 1 when the construction was completed. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8% and a $350,000 loan payable outstanding at a borrowing rate of 6%.

a. Record the acquisition of this asset, assuming that Hayes prepares financial statements in accordance with IFRS.