Exercise 10-16 Your answer is partially correct. Try again. Sage 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 $150,000 cash. The following information was gathered. Description Machinery Equipment Initial Cost on Seller's Books $150,000 90,000 Depreciation to Date on Seller's Books $75,000 15,000 Book Value on Seller's Books $75,000 75,000 Appraised Value $135,000 45,000 Asset 3: This machine was acquired by making a $15,000 down payment and issuing a $45,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $22,500 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $53,850. 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 Accumulated depreciation to date of sale Fair value of machinery traded Cash received Fair value of machinery acquired $150,000 60,000 120,000 15,000 105,000 Asset 5: Equipment was acquired by issuing 100 shares of $12 par value common stock. The stock had a market price of $17 per share. Construction of Building: A building was constructed on land purchased last year at a cost of $225,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date 2/1 6/1 9/1 11/1 Payment $180,000 540,000 720,000 150,000 To finance construction of the building, a $900,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $300,000 of other outstanding debt during the year at a borrowing rate of 8%. Record the acquisition of each of these assets. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to O decimal places e.g. 58,971. 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 o for the amounts.) Debit Credit Account Titles and Explanation Acquisition of Assets 1 and 2 Machinery 112,500 Equipment 37,500 Cash 150,000 Acquisition of Asset 3 Machinery PVP PPPP | 53,850 THE PPPT Discount on Notes Payable 6150 TCash 15,000 Notes Payable 145,000| Acquisition of Asset 4 Machinery 90000 . Taccumulated Depreciation- 60,0001 Tcash 15,000 T Machinery 90000 TGain on Disposal of Machir Acquisition of Asset 5 TEquipment U T Common Stock | | 1,200 Paid-in Capital in Exces | 500 (To record acquisition of Office Equipment) VVV V V Buildings TLand 225,000 TCash Interest Expense