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P 8 - 1 ( Algo ) Explaining the Nature of a Long - Lived Asset and Determining and Recording the Financial Statement Effects of

P8-1(Algo) Explaining the Nature of a Long-Lived Asset and Determining and Recording the Financial Statement Effects of Its Purchase LO8-1,8-2
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On January 2, Summers Company received a machine that the company had ordered with an invoice price of $100,000. Freight costs of $820 were paid by the vendor per the sales agreement. The company exchanged the following on January 2 to acquire the machine:
Issued 1,500 shares of Summers Company common stock, par value $1(market value, $3.50 per share).
Signed a note payable for $64,000 with an 11.7 percent interest rate (principal plus interest are due April 1 of the current year).
The balance of the invoice price was on account with the vendor, to be paid in cash by January 12.
On January 3, Summers Company paid $2,500 cash for installation costs to prepare the machine for use.
On January 12, Summers Company paid the balance due on its accounts payable to the vendor.

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