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Problem 10-6

Blue Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $150,000 in cash. In addition, it paid $2,400 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 $36,000. 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	$ 262,800
May 1	333,600
July 1	63,600

The building was completed on July 1, 2018.

To finance construction of this plant, Blue borrowed $603,600 from the bank on December 1, 2017. Blue had no other borrowings. The $603,600 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

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