A is corrent. The requirement is to determine the amount of the recording cost of the building. The office building and the land are a lump-sum purchase. The acquisition cost of both the land and the building is equal to the cash paid plus the mortgage assumed, $750,000 + $250,000 = $1,000,000. Since 60% of the assessed value can be allocated to the building, 60% of the amount paid ($1,000,000 × 60% = $600,000) should be allocated to the building account. Therefore, this answer is correct.
B is incorrect. The office building and the land are a lump-sum purchase. The acquisition cost of both the land and the building is equal to the cash paid plus the mortgage assumed, $750,000 + $250,000 = $1,000,000. Since 60% of the assessed value can be allocated to the building, 60% of the amount paid ($1,000,000 × 60% = $600,000) should be allocated to the building account.
B is incorrect. The office building and the land are a lump-sum purchase. The acquisition cost of both the land and the building is equal to the cash paid plus the mortgage assumed, $750,000 + $250,000 = $1,000,000. Since 60% of the assessed value can be allocated to the building, 60% of the amount paid ($1,000,000 × 60% = $600,000) should be allocated to the building account.
D is incorrect. The office building and the land are a lump-sum purchase. The acquisition cost of both the land and the building is equal to the cash paid plus the mortgage assumed, $750,000 + $250,000 = $1,000,000. Since 60% of the assessed value can be allocated to the building, 60% of the amount paid ($1,000,000 × 60% = $600,000) should be allocated to the building account.
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