Logan 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 at a lump sum for 104,000 cash. 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 100,000 50,000 50,000 90,000

Equipment 60,000 10,000 50,000 30,000

Asset 3: This machine was acquired by making a 10,000 down payment and issuing a 30,000, 2-year, zero-interest-bearing note. The note is to be paid off in two 15,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for 35,900. 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 100,000

Accumulated depreciation to date of sale 36,000

Fair value of machinery traded 80,000

Cash received 10,000

Fair value of machinery acquired 70,000

Asset 5: Equipment was acquired by issuing 100 shares of 8 par value ordinary shares. The shares have a market price of 11 per share. Construction of Building: A building was constructed on land with a cost of 180,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows.

Date Payment

2/1 120,000

6/1 360,000

9/1 480,000

11/1 100,000

To finance construction of the building, a 600,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had 200,000 of other outstanding debt during the year at a borrowing rate of 8%. Instructions Record the acquisition of each of these assets. Interest expense for the year has been recorded.