On 2 January 2015, Powerhouse Ltd purchased, by exchanging $306,000 cash and a $184,000, 12%, 18-month finance company loan, assets with the following independently determined appraised values:

Appraised value

Building $320,000

Land $ 80,000

Machinery and equipment $ 100,000

The estimated useful life of the building is 30 years and its residual value is $20,000. The $100,000 machinery and equipment amount consists of three machines independently valued at $29,000 each and some office equipment valued at $13,000. The estimated useful lives and residual values for these assets are:Powerhouse Ltd uses the straight-line depreciation method. Ignore GST.

Useful life Residual value

Machine 1 6 years $3,100

Machine 2 9 years 3,100

Machine 3 4 years 4,100

Office equipmenT 5 years 500

Powerhouse Ltd uses the straight-line depreciation method. Ignore GST.

Prepare journal entries (in general journal form) to record the following.

1. The purchase of the assets.

2. The accrual of interest expense on the loan on 31 December 2015.

3. Depreciation expense for the year 2015.

4. The payment of the loan on 2 July 2016.