Flash Labs Ltd. conducts experiments, analysis, and lab tech services in the agriculture industry for a wide variety of clients. Based on its business model, the company needs to continually refresh the equipment it uses to keep up with technology changes. On June 1^st, 2023, the company was able to get a great deal on two pieces of equipment and supplies from a smaller lab that is going out of business. The following are the details of the deal:

Fair Value

Equipment A $96,000

Equipment B $75,000

Supplies $13,000

Flash Labs Ltd. paid $155,000 cash for all three items, plus the seller was able to transfer the remaining insurance coverage on both pieces of equipment (good for the next 7 months) as it was already paid for, and the provider would not issue a refund to the seller. This is valued at $4,000.

Instructions

Using the relative fair value approach (round to the nearest whole number), record the journal entry to account for this purchase transaction.