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4 Part 1 of 2 4 points Required information P 8 - 1 ( Algo ) Explaining the Nature of a Long - Lived Asset

4
Part 1 of 2
4
points
Required information
P8-1(Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial Statement Effects of Its Purchase LO8-1,8-2
[The following information applies to the questions displayed below.]
On January 2, Summers Company received a machine that the company had ordered with an invoice price of $100,000. Freight costs of $790 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine:
a. Issued 2,200 shares of Summers Company common stock, par value $1(market value, $3.50 per share).
b. Signed a note payable for $50,000 with an 10.5 percent interest rate (principal plus interest are due April 1 of the current year).
c. The balance of the invoice price was on account with the vendor, to be paid in cash by January 12.
On January 3, Summers Company paid $2,100 cash for installation costs to prepare the machine for use.
On January 12, Summers Company paid the balance due on its accounts payable to the vendor.
P8-1 Part 2
Required:
2. Record the purchase on January 2, the installation costs on January 3, and the subsequent payment on January 12.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Answer is not complete.
\table[[No,Date,General Journal,Debit,Credit],[1,January 02,Equipment,(,100,790\times ,],[,Common stock,(,2,200\times ,],[,Additional paid-in-capital,V,5,500\times ,],[,Note payable,2,50,000\times ,],[,Accounts payable,V,43,090\times ,],[2,January 03,Equipment,V,2,100,],[,Cash,(V),,2,100],[3,January 12,Accounts payable,V,42,300,],[,Cash,(V),,42,300vv]]
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