TB Problem 10-212 (Static) On January 3, 2024, Michelson... On January 3, 2024, Michelson & Sons acquired a tract of land just outside the city limits. The land and existing building were purchased for $2.4 million. Michelson paid $400,000 and signed a noninterest-bearing note requiring the company to pay the remaining $2,000,000 on December 31, 2025. An interest rate of 7% properly reflects the time value of money for this type of loan agreement. Transfer taxes, title insurance, and other costs totaling $24,000 were paid at closing. At the end of February, the old building was demolished at a cost of $120,000, and an additional $100,000 was paid to clear and grade the land. Construction of a new building began on March 1 and was completed on October 30. Construction expenditures were as follows: $ 800,000 1,200,000 1,200,000 600,000 March 30 June 30 July 30 September 1 Michelson did not borrow specifically for the construction project, but did have the following debt outstanding throughout 2024: $6,000,000, 8% long-term note payable $2,000,000, 5% long-term note payable In December, the company purchased equipment and office furniture and fixtures for a lump-sum price of $800,000. The fair values of the equipment and the furniture and fixtures were $540,000 and $360,000, respectively. In December, Michelson paid $340,000 for the construction of parking lots and landscaping. Note: Use appropriate factor(s) from the tables provided. Round other Intermediate calculations to the nearest whole dollar. Enter your answers in whole dollars. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: 1. Determine the initial values of the various assets that Michelson acquired or constructed during 2024. 2. How much interest expense will Michelson report in its 2024 income statement? Answer is complete but not entirely correct. S 2,390,880 s 340,000 $ 4,380,000 X S 480,000 S 320,000 S 1. Land 1. Land improvements 1. Building 1. Equipment 1. Furniture and fixtures 2. Interest expense 0x