Indigo Company was incorporated on January 2, 2018, but was unable to begin manufacturing activities until July 1, 2018, because new factory facilities were not completed until that date.

The Land and Buildings account reported the following items during 2018.

January 31 Land and building

$169,100

February 28 Cost of removal of building

9,958

May 1 Partial payment of new construction

62,410

May 1 Legal fees paid

4,230

June 1 Second payment on new construction

47,100

June 1 Insurance premium

2,280

June 1 Special tax assessment

4,350

June 30 General expenses

39,020

July 1 Final payment on new construction

32,150

December 31 Asset write-up 52,829

423,427

December 31 Depreciation-2018 at 1% (4,066 )

December 31, 2018 Account balance $419,361

The following additional information is to be considered.

1. To acquire land and building, the company paid $89,100 cash and 800 shares of its 8% cumulative preferred stock, par value $100 per share. Fair value of the stock is $118 per share.

2. Cost of removal of old buildings amounted to $9,958, and the demolition company retained all materials of the building.

3. Legal fees covered the following.

Cost of organization

$700

Examination of title covering purchase of land

1,430

Legal work in connection with construction contract

2,100

$4,230

4. Insurance premium covered the building for a 2-year term beginning May 1, 2018.

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

6. General expenses covered the following for the period from January 2, 2018, to June 30, 2018.

President's salary

$34,592

Plant superintendent's salary-supervision of new building

4,428

$39,020

7. Because of a general increase in construction costs after entering into the building contract, the board of directors increased the value of the building $52,829, 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.

8. Estimated life of building-50 years.

Depreciation for 2018-1% of asset value (1% of $406,600, or $4,066).

Prepare entries to reflect correct land, buildings, and depreciation accounts at December 31, 2018.