1.Below are transactions related to Marin Company.

(a)The City of Pebble Beach gives the company5acres of land as a plant site. The fair value of this land is determined to be $85,170.

(b)13,000shares of common stock with a par value of $52per share are issued in exchange for land and buildings. The property has been appraised at a fair value of $851,700, of which $179,010has been allocated to land and $672,690to buildings. The stock of Marin Company is not listed on any exchange, but a block of100shares was sold by a stockholder12months ago at $68per share, and a block of200shares was sold by another stockholder18months ago at $60per share.

(c)No entry has been made to remove from the accounts for Materials, Direct Labor, and Overhead the amounts properly chargeable to plant asset accounts for machinery constructed during the year. The following information is given relative to costs of the machinery constructed.

Materials used $12,420

Factory supplies used 874

Direct labor incurred 17,250

Additional overhead (over regular) caused by construction of machinery, excluding factory supplies used

2,700

Fixed overhead rate applied to regular manufacturing operations 60% of direct labor cost

Cost of similar machinery if it had been purchased from outside suppliers 43,730

Prepare journal entries on the books of Marin Company to record these transactions.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.

Account Titles and Explanation

Debit Credit

(a)

(b)

(c)

2.Pronghorn Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2020, to expand its production capacity to meet customers' demand for its product. Pronghorn issues a(n) $1,680,000,5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is12%. The company will pay off the note in five $336,000installments due at the end of each year over the life of the note.

Prepare the journal entry at the date of purchase.(Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entry at the end of the first year to record the payment and interest, assuming that the company employs the effective-interest method.(Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare the journal entry at the end of the second year to record the payment and interest.(Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Assuming that the equipment had a10-year life and no salvage value, prepare the journal entry necessary to record depreciation in the first year. (Straight-line depreciation is employed.)(Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)