The following expenditures relating to plant assets were made by Prather Company during the first 2 months of 2020.

1. Paid $5,000 of accrued taxes at time plant site was acquired. select an account title
2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. select an account title
3. Paid $850 sales taxes on new delivery truck. select an account title
4. Paid $17,500 for parking lots and driveways on new plant site. select an account title
5. Paid $250 to have company name and advertising slogan painted on new delivery truck. select an account title
6. Paid $8,000 for installation of new factory machinery. select an account title
7. Paid $900 for one-year accident insurance policy on new delivery truck. select an account title
8. Paid $75 motor vehicle license fee on the new truck.

Explain the application of the historical cost principle in determining the acquisition cost of plant assets.