Recording Acquisition Scenarios

Review of the property, plant, and equipment accounts of James Company reveals the following transactions.

$1.$ On January $1,$ new equipment is purchased with a list price of $$30,000.$ The company did not take advantage of a $1\%$ cash discount available upon full payment of the invoice within $10$ days. Shipping costs paid by the seller were $$100.$ Installation costs are $$400,$ representing $10\%$ of the monthly salary of the manager $($ installation took two days$).$ A wall is moved two feet at a cost of $$800$ to make room for the equipment. Cash discounts not taken are considered interest expense.

$2.$ During January, the $$rst month of operations, the newly purchased equipment became inoperative due to a defect. The seller repaired the equipment at no cost; however, the specially trained operator was idle during the week the machine was inoperative. The operator was paid regular wages $($ $$650)$ during the period, although the only work performed was to observe the repair by the factory representative. Hint: Choose your debit answer from accounts Equipment and Manufacturing Overhead.

$3.$ On January $1,$ the company bought $$xtures with a list price of $$4,500$; the company paid $$1,500$ cash and issued a one$-$year, noninterest$-$bearing note payable for the balance. The current interest rate for this type of note was $15\%.$

$4.$ On January $1,$ the company purchased an automatic counter to be attached to a machine in use; cost was $$700.$ The estimated useful life of the counter was $7$ years, and the estimated life of the machine was $10$ years.

$5.$ On July $1,$ a contractor completed construction of a building for the company. The company paid the contractor with a $$400,000$ face value, $20-$year, $8\%$ bonds payable, at which time $$nancial consultants advised that the bonds would sell at $96($ $$384,000).$

$6.$ On December $31,$ the company received a property contribution from the city for future expansion of its manufacturing facilities. The fair value of this property is estimated at $$40,000,$ although the cost of the property on the city$$s records is $$10,000.$ There are no donor$-$imposed conditions, and the transaction is not considered to be an exchange. Question: Record depreciation at the end of the year for $(1)$ equipment, $(2)$xtures$,$ and $(3)$ building. None of these assets is expected to have a residual value except $$xtures $($residual value is $$500).$ Estimated useful lives are: $$xtures$,5$ years; equipment, $10$ years; and building, $40$ years. The company uses straight$-$line depreciation. Provide a separate entry for each asset.