Use the following data for questions 1 and 2 below:
Quinn Company bought real estate, on which there was an old office building, for $400,000. They paid $40,000 in cash as a down payment and signed a 10% mortgage for the remainder. They immediately had the old building razed at a net cost of $35,000. Attorneys were paid $6,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for Quinn's new office building. $20,000 was paid for excavation for the basement of the new building. $1,400,000 was paid for construction of the new building, and $75,000 was paid for a parking lot and necessary walkways and driveways.
1. The new office building should be recorded at
a. $1,400,000.
b. $1,423,000.
c. $1,420,000.
d. $1,458,000.
2. Land should be recorded at a cost of
a. $435,000.
b. $441,000.
c. $464,000.
d. $461,000.