Sheridan 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 $260,000 cash. The following information was gathered. Asset 3: This machine was acquired by making a $26,000 down payment and issuing a $78,000, 2- year, zero-interest-bearing note. The note is to be paid off in two $39,000 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $93,340 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 $260,000 Accumulated depreciation to date of sale 140,000 Fair value of machinery traded Cash received Fair value of machinery acquired 208,000 26,000 182,000 Asset 5: Equipment was acquired by issuing 100 shares of $21 par value common stock. The stock had a market price of $29 per share. Construction of Building: A building was constructed on land purchased last year at a cost of $390,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date Payment 2/1 $312,000 6/1 936,000 9/1 1,248,000 11/1 260,,000 To finance construction of the building, a $1,560,000. 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $520,000 of other outstanding debt during the year at a borrowing rate of 8%.