Problem 10-6

Headland Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $141,600 in cash. In addition, it paid $3,120 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $1,200 being received from the sale of materials. Architectural plans were also formalized on December 1, 2017, when the architect was paid $37,200. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.

Date of Payment		Amount of Payment
March 1		$247,200
May 1		336,000
July 1		63,600

The building was completed on July 1, 2018. To finance construction of this plant, Headland borrowed $608,400 from the bank on December 1, 2017. Headland had no other borrowings. The $608,400 was a 10-year loan bearing interest at 10%. Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018. (Round answers to 0 decimal places, e.g. 5,275.)

				December 31, 2017		December 31, 2018
(a)		Balance in Land Account
(b)		Balance in Building
(c)		Balance in Interest Expense