Hayes 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 $180,000cash The following information was gathered Description Initial Cost on Sellers Books Depreciation to Date on Sellers Books Book Value on Sellers Books Appraised Value Machinery $180,000 $90,000 $90,000 $162,000 Equipment 108,000 18,000 90,000 54,000 Asset 3 This machine was acquired by making a $18,000down payment and issuing a $54,000, 2 year, zero interest bearing note The note is to be paid off in two $27,000installments made at the end of the first and second years It was estimated that the asset could have been purchased outright for $64,620 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 $180,000 Accumulated depreciation to date of sale 72,000 Fair value of machinery traded 144,000 Cash received 18,000 Fair value of machinery acquired 126,000 Asset 5 Office equipment was acquired by issuing100shares of $14par value common stock The stock had a market price of $20per share Construction of Building A building was constructed on land purchased last year at a cost of $270,000 Construction began on February 1 and was completed on November 1 The payments to the contractor were as follows Date Payment 2 1 $216,000 6 1 648,000 9 1 864,000 11 1 180,000 To finance construction of the building, a $1,080,000,12 construction loan was taken out on February 1 The loan was repaid on November 1 The firm had $360,000of other outstanding debt during the year at a borrowing rate of8 Record the acquisition of each of these assets (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 0 for the amounts ) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Acquisition of Asset 3 Acquisition of Asset 4 Acquisition of Asset 5 (To record acquisition of Office Equipment)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

Hayes 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

Hayes 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 $180,000cash. The following information was gathered.

Description	Initial Cost on Sellers Books	Depreciation to Date on Sellers Books	Book Value on Sellers Books	Appraised Value
Machinery	$180,000	$90,000	$90,000	$162,000
Equipment	108,000	18,000	90,000	54,000

Asset 3:This machine was acquired by making a $18,000down payment and issuing a $54,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $27,000installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $64,620.

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	$180,000
Accumulated depreciation to date of sale	72,000
Fair value of machinery traded	144,000
Cash received	18,000
Fair value of machinery acquired	126,000

Asset 5

Office equipment was acquired by issuing100shares of $14par value common stock. The stock had a market price of $20per share.

Construction of Building:A building was constructed on land purchased last year at a cost of $270,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows.

Date	Payment
2/1	$216,000
6/1	648,000
9/1	864,000
11/1	180,000

To finance construction of the building, a $1,080,000,12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $360,000of other outstanding debt during the year at a borrowing rate of8%.

Record the acquisition of each of these assets.(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 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
Acquisition of Assets 1 and 2



Acquisition of Asset 3




Acquisition of Asset 4





Acquisition of Asset 5



(To record acquisition of Office Equipment)