Hayes Industries purchased the following assets and constructed a building as well. All this was done during the current year.

Assets 1 and 2: These assets were purchased as a lump sum for $100,000 cash. The following information was gathered.

Asset 3: This machine was acquired by making a $10,000 down payment and issuing a $30,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $15,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $35,900.

Asset 4: This machinery was acquired by trading in used machinery. (The exchange lacks commercial substance.) Facts concerning the trade-in are as follows.

Cost of machinery traded.......................................$100,000Accumulated depreciation to date of sale................40,000Fair value of machinery traded..................................80,000Cash received...............................................................10,000Fair value of machinery acquired..............................70,000

Asset 5: Equipment was acquired by issuing 100 shares of $8 par value common stock. The stock had a market price of $11 per share.

Construction of Building: A building was constructed on land purchased last year at a cost of $150,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows.

Date ? ? ? ? ? ? ? ? ? ? ? ? Payment2/1.............................$120,0006/1...............................360,0009/1...............................480,00011/1.............................100,000

To finance construction of the building, a $600,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $200,000 of other outstanding debt during the year at a borrowing rate of 8%.

Instructions

Record the acquisition of each of these assets.

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Depreciation to Initial Cost on Seller's Books Date on Seller's Book Value on Description Appraised Value Books Seller's Books $100,000 Machinery Equipment $50,000 $50,000 $90,000 60,000 10,000 50,000