602 DIGGING DEEPER (LO 2, 3, 9) sabor CHAPTER IO W Property, Plant, and Equipment: Accounting Model Basics (c) From the perspective of a potential investor, what are the financial statement effects of capitalizing borrowin related to qualifying assets? (d) What effects, if any, will the recording of purchases to an incorrect account (land, building, machinery, or an property, plant, and equipment asset) have on the financial statements? Provide an example. od E10-5 (Asset Acquisition) Hayes Industries Corp. purchased the following assets and also constructed a b- All this was done during the current year using a variety of financing alternatives. Description Machinery Office Equipment Assets 1 and 2 These assets were purchased together for $100,000 cash. The following information was gathered: Initial Cost on Seller's Books $100,000 60,000 Accountiva ent Depreciation to Date on Seller's Books $50,000 10,000 Cost of truck traded hiw sonsbroo Accumulated depreciation to date of sale Fair market value of truck t