Grouper Resorts began construction of a new hotel on December 1, 2025. On this date, the company purchased a parcel of land for $260,000 in cash. In addition, it paid $2,700 in surveying costs and $6,500 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $9,900, with $1,900 being received from the sale of materials. Architectural plans were also formalized on December 1, 2025, when the architect was paid $62,000. The necessary building permits costing $16,000 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 as follows: Date of Payment Amount of Payment January 1 $798,000 April 1 908,000 July 1 495,000 The building was completed on July 1, 2026. To finance construction of this hotel, Grouper borrowed $2,508,000 from the bank on December 1, 2025. Grouper had no other borrowings. The $2,508,000 was a 10-year loan bearing interest at 6%. Compute the balance in each of the following accounts at December 31, 2025, and December 31, 2026. (Round answers to O decimal places, e.g. 5,275.) (a) (b) (c) Land Buildings Interest Expense December 31, 2025 277200 79776 10370 $ December 31, 2026 277200 2391101 184381
Grouper Resorts began construction of a new hotel on December 1, 2025. On this date, the company purchased a parcel of land for $260,000 in cash. In addition, it paid $2,700 in surveying costs and $6,500 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $9,900, with $1,900 being received from the sale of materials. Architectural plans were also formalized on December 1, 2025, when the architect was paid $62,000. The necessary building permits costing $16,000 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 as follows: Date of Payment Amount of Payment January 1 $798,000 April 1 908,000 July 1 495,000 The building was completed on July 1, 2026. To finance construction of this hotel, Grouper borrowed $2,508,000 from the bank on December 1, 2025. Grouper had no other borrowings. The $2,508,000 was a 10-year loan bearing interest at 6%. Compute the balance in each of the following accounts at December 31, 2025, and December 31, 2026. (Round answers to O decimal places, e.g. 5,275.) (a) (b) (c) Land Buildings Interest Expense December 31, 2025 277200 79776 10370 $ December 31, 2026 277200 2391101 184381
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 55P
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Transcribed Image Text:Grouper Resorts began construction of a new hotel on December 1, 2025. On this date, the company purchased a parcel of land for
$260,000 in cash. In addition, it paid $2,700 in surveying costs and $6,500 for a title insurance policy. An old dwelling on the premises
was demolished at a cost of $9,900, with $1,900 being received from the sale of materials.
Architectural plans were also formalized on December 1, 2025, when the architect was paid $62,000. The necessary building permits
costing $16,000 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 as follows:
Date of Payment
January 1
April 1
July 1
The building was completed on July 1, 2026.
To finance construction of this hotel, Grouper borrowed $2,508,000 from the bank on December 1, 2025. Grouper had no other
borrowings. The $2,508,000 was a 10-year loan bearing interest at 6%.
Compute the balance in each of the following accounts at December 31, 2025, and December 31, 2026. (Round answers to O decimal
places, e.g. 5,275.)
(a) Land
(b)
Amount of Payment
$798,000
908,000
495,000
(c)
Buildings
Interest Expense
eTextbook and Media
$
December 31, 2025
277200
79776
10370
$
December 31, 2026
277200
2391101
184381
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