On June 1, the Wallace Corp. received a machine it had ordered with an invoice price of $60,000. Freight costs of $650 were paid by the vendor per the sales agreement. The company exchanged the following on June 1 to acquire the machine:
a. Issued 2,000 shares of Wallace Corp. common stock, par value $2 (market value, $6 per share).
b. Signed a 12 percent note payable for $40,000; principal and interest are due September 1 of the current year.
c. The balance of the invoice price was on account with the vendor, to be paid in cash on July 1. On June 3, Wallace Corp. paid $1,500 cash for installation costs.  On July 1, Wallace Corp. paid the balance due on its accounts payable to the vendor.

Required:
1. What are the classifications of long-lived assets? Explain their differences.
2. Record the purchase on June 1, the payment of the installation costs on June 3, and the subsequent payment on July 1. Show computations.
3. Indicate the accounts, amounts, and effects (+ for increase and − for decrease) of the purchase and subsequent cash payment on the accounting equation. Use the following structure:

4. What was the cost of the equipment recorded by Wallace Corp.? Explain the basis you used for any questionable items.

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Date Assets || Liabilities + Stockholders' Equity