On 1st January, 20x1 an entity purchased a land and building for 4,000,000. Seventy-five percent (75%) of the purchase price is allocated to the land. The purchase price was funded by a loan of 4,010,000 (including 10,000 loan processing fees). Non-refundable property transfer taxes and direct legal costs of 200,000 and 40,000 respectively were incurred in acquiring the properties. The entity redeveloped the building into upmarket residential apartments for rent under operating leases to independent third parties. Expenditures on renovation were: Planning permission 100,000 Construction costs (including 60,000 refundable purchase taxes) 1,500,000 The redevelopment was completed and the apartments ready for rental on 1st October, 20x1. The local government charged the entity property service taxes of 1,000 per month on the building. What is the cost of the building at initial recognition? a. 2,671,500 b. 2,669,000 c. 2,611,500 d. 2,609,000