Pearl Industries Inc. constructed a building and acquired five assets during the current year. Construction of Building: A building was constructed on land purchased last year at a cost of $201,600. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date Payment March 1 $302,400 July 1 231,000 October 1 273,000 Pearl obtained a $588,000, 8% construction loan on March 1. Pearl repaid the loan on October 1. Pearl had $336,000 of other outstanding debt during the year at a borrowing rate of 9%. Asset 1: Pearl acquired office furniture by making a $6,300 down payment and issuing a $8,400, 2-year, zero-interest-bearing note. The note is to be paid off in two $4,200 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $13,608. Asset 2: Pearl acquired manufacturing equipment by trading in used manufacturing equipment. (The exchange lacks commercial substance.) Facts concerning the trade-in are as follows. Cost of equipment traded in $43,680 Accumulated depreciation on equipment traded in - to date of sale 28,560 Fair value of equipment traded 21,000 Cash received 2,100 Fair value of equipment acquired 18,900