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Land refers to any actions involving the physical land that a company owns.
This includes preparing land for a new building!
Scenario: Your lemonade stand purchases a plot of land for $10,000 for a new store. You spend $2,500 to demolish the old building that was there. Does this impact the Land or Building accounts, and by how much?
We're dealing with...
- Purchasing new land
- Preparing land for construction (through demolition)
...which means these actions will be fall under the Land account!
Land = $10,000 (Purchase) + $2,500 (Demolition)
Demolition is positive because that action was an "investment" into our land!
