Problem 1

The following transactions are unrelated:

1. a) Equipment listed at $12,000 was purchased at terms of 4%/10, net 30. To take advantage of the discount, the company borrowed $9,000 of the purchase price by issuing a one-year 11 percent note that was repaid with interest at maturity.

2. b) Equipment with a list price of $5,000 was purchased under the terms of 2%/10, net 30. Payment was made 20 days after purchase.

3. c) A company paid $260,000 for land upon which to build a new facility. The cost to raze and remove an old building on the site of the newly proposed facility was $50,000. Usable fixtures from the old building were sold for $10,000. The company paid $3,000 to the architect that designed the new building, $30,000 for excavation of the basement, and $420,000 to a contractor for construction of the building.

Required -

Prepare journal entries for the above transactions.