Information:

On June 29, 2011, Drew Company acquired a new automatic milling machine from Dayton Inc. Drew paid $20,000 in cash and signed a one-year, 10 percent note for $80,000. Following the purchase, Drew incurred freight charges, on account, of $2,900 to ship the machine from Dayton's factory to Drew's plant. After the machine arrived, Drew paid J. B. Contractors $5,300 for installation. Drew also used $800 of supplies and $1,500 of labor on trial runs.

Required:

1. Determine the cost of the machine.

2. Prepare the journal entry necessary to record the purchase of the machine.