Question 2 of 3 < > 12.6/38 Flounder 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 as a lump sum for $193,440 cash. The following information was gathered: Description Machinery Initial Cost on Seller's Books Depreciation to Date on Seller's Books Book Value on Seller's Books Appraised Value $67,600 $31,200 $36,400 $160,000 Office furniture 26,000 10,400 15,600 40,000 Asset 3 This machine was acquired by making a $26,000 down payment and issuing a $78,000, 1-year, zero-interest-bearing note. The note is to be paid off in at the end of the first year. It was estimated that the asset could have been purchased outright for $94,640. 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 $156,000 Accumulated depreciation to date of sale 62,400 Fair value of machinery traded 99,840 Cash received 20,800 Fair value of machinery acquired 79,040 Asset 5 Machinery was acquired by issuing 1,000 shares of $1 par value common stock. The stock was actively traded and had a market value of $7 per share. Construction of Building A building was constructed on land purchased last year at a cost of $124,800. Construction began on March 1 and was completed on September 1. The payments to the contractor were as follows: Date Payment 3/1 $208.000 5/1 312,000 6/1 104,000 9/1 416,000 To finance construction of the building, a $624,000, 10% construction loan was taken out on March 1. The loan was repaid on September 1. The firm had $416,000 of other outstanding debt during the year at a borrowing rate of 12% Record the acquisition of each of these assets. (List all debit entries before credit entries. Round intermediate calculations to 5 decimal places, eg. 1.25124 and final answer to O decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Question 2 of 3 < > enter O for the amounts.) Account Titles and Explanation Acquisition of Assets 1 and 2 Machinery Office Furniture Cash Acquisition of Asset 3 Machinery Discount on Notes Payable Cash Notes Payable Debit 160000 40000 94640 9360 Credit 12.6/38 193440 26000 78000 Acquisition of Asset 4 Gain on Disposal of Machinery 99840 Cash Loss on Disposal of Machinery Machinery Common Stock Acquisition of Asset 5 Buildings creditor (To record machinery) 7000 1040000 20800 75040 1000 6000 1040000 Acquisition of Asset 5 Buildings creditor (To record machinery) (To record land and buildings) 1040000 6000 1040000