Assets 1 and 2: These assets were purchased as a lump sum for $260,000 cash. The following information was thered Description Machinery Equment Initial Cost on Seller's Books $260,000 156,000 Depreciation to Date on Seller's Books $130,000 26,000 look Value Seller's Books $130,000 130,000 Appraised Value $230,000 78.000 Asset i This machine was acquired by making a $26.000 down payment and issuing a $78,000, water interest bearing on the note is to be paid off to $39,000 installment first and second years. It was estimated that the asset could have been purchased outright for $93,140 Asset 4: This machinery was acquired by trading in used machinery (The exchange lacks commercial substance) Facts concern the trade in are as follows $260.000 104,000 Cost of machinery traded Accumulated depreciation to date of sale Fair value of machinery traded Cash received Fair value of machinery acquired 200,000 25,000 182,000 Asset 5: Equipment was acquired by Issuing 100 shares of $21 par value common stock. The stock had a market price of $29 per share Construction of Building Abuting was constructed on land purchased last year at a cost of $390,000. Construction began on February 1 were as follows. was completed on November 2/1 6/ 1 / 11/1 Payment $312.000 930,000 1,248,000 260.000 out on February 1 The loan was repaid on November 1. The form had $520,000 of other outstanding debt during To finance construction of the building a $1,560,000, 12% construction loan wa a borrowing rate of 8% Debit Credit Account Titles and Explanation Acquisition of Assets 1 and 2 Machinery 195000 Equipment 130000 325000 T Cash Acquisition of Asset 3 6500 Acquisition of Asset 5 TEquipment 2900 T Common Stock 2100 800 T Paid-in Capital in Exces (To record acquisition of Office Equipment) TLand 390000 T Buildings TCash Interest Expense Assets 1 and 2: These assets were purchased as a lump sum for $260,000 cash. The following information was thered Description Machinery Equment Initial Cost on Seller's Books $260,000 156,000 Depreciation to Date on Seller's Books $130,000 26,000 look Value Seller's Books $130,000 130,000 Appraised Value $230,000 78.000 Asset i This machine was acquired by making a $26.000 down payment and issuing a $78,000, water interest bearing on the note is to be paid off to $39,000 installment first and second years. It was estimated that the asset could have been purchased outright for $93,140 Asset 4: This machinery was acquired by trading in used machinery (The exchange lacks commercial substance) Facts concern the trade in are as follows $260.000 104,000 Cost of machinery traded Accumulated depreciation to date of sale Fair value of machinery traded Cash received Fair value of machinery acquired 200,000 25,000 182,000 Asset 5: Equipment was acquired by Issuing 100 shares of $21 par value common stock. The stock had a market price of $29 per share Construction of Building Abuting was constructed on land purchased last year at a cost of $390,000. Construction began on February 1 were as follows. was completed on November 2/1 6/ 1 / 11/1 Payment $312.000 930,000 1,248,000 260.000 out on February 1 The loan was repaid on November 1. The form had $520,000 of other outstanding debt during To finance construction of the building a $1,560,000, 12% construction loan wa a borrowing rate of 8% Debit Credit Account Titles and Explanation Acquisition of Assets 1 and 2 Machinery 195000 Equipment 130000 325000 T Cash Acquisition of Asset 3 6500 Acquisition of Asset 5 TEquipment 2900 T Common Stock 2100 800 T Paid-in Capital in Exces (To record acquisition of Office Equipment) TLand 390000 T Buildings TCash Interest Expense
