Problem:
A company paid $150,000, plus a 6% commission, and $4,000 in closing costs for a property. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500.
Required:
Question: What should be the allocation of this property's costs in the company's accounting records?
Note: Provide support for rationale.