The accountant has made the following calculations and journal entries to record the following transactions. There are numerous errors. You will need to find the calculation and/or journal entries that are incorrect, 1. write the correct answer, showing your work and/or correct journal entry and 2. explain how the accountants errors would affect the financial statements. For example, if the story stated that revenue was $57,500, but the accountant recorded the revenue as $75,500, you will need to write the correct journal entry, then explain that the error would overstate the revenue on the Income Statement and cause Net Income to be too high. The wrong Net Income would be included on the Statement od Stockholders Equity resulting in Retained Earnings being too high. Retained earnings is included on the Balance Sheet and therefore, overstate Equity and assets. Journal paper and a space to write the effects of the accountants errors has been provided below. Journal paper does NOT indicate that the journal entry is correct or incorrect or how many accounts are involved. The accountant for SpaceX received the following information and made the journal entry. On Sept. 1, 2020, SpaceX purchased land, a building, and equipment for one price of $3,860,000. The estimated fair values of the land, building, and equipment are $1,240,000, $1,920,000, and $840,000, respectively. SpaceX issued a $3,860,000, 4%, six-year note to make this purchase. The monthly payment is $61,690, which includes principal and interest payments. The building is depreciated using straight-line and has a salvage value of $4,800. The equipment is depreciated using double-decline and has a salvage value of $9,600. Both have a useful life of 10 years.

1.

Date	Account	Debit	Credit
9/1	Land	1,240,000
	Building	1,920,000
	Equipment	840,000
	Gain on Purchase		140,000
	Cash		3,860,000

2.

Date	Account	Debit	Credit
9/1	Cash	3,860,000
	Loan Payable		3,860,000
9/30	Loan Payable	61,690
	Cash		61,690

3. Depreciation

Building ($1,920,000 4,800)/120 months = $15,960

Equipment = ($840,000 9,600)/120 = $6,920 x 2 = $13,840

Land = ($ 1,240,000 0)/120 = 10,333

Date	Account	Debit	Credit
9/30	Depreciation Expense-Building	15,960
	Accumulated Depreciation-Building		15,960
	Depreciation Expense-Land	10,333
	Accumulated Depreciation-Land		10,333
	Depreciation Expense-Equipment	13,840
	Accumulated Depreciation-Equipment		13,840

4.

Also on Sept. 1, 2020, SpaceX sold an old piece of machinery for $16,750. The original price of the machinery was $40,000, accumulated depreciation is up-to-date and totals $22,500.

Date	Account	Debit	Credit
9/1	Cash	40,000
	Accumulated Depreciation	22,500
	Gain		45,750
	Machinery		16,750

5.

SpaceX issued a $3,000,000 of 10% bonds, due in ten years, with interest payable semi-annually on Sept. 30 and March 31 each year. The market interest rate is 8% the bonds will issue at $3,200,000.

Date	Account	Debit	Credit
9/1	Cash	3,200,000
	Bond Payable		3,200,000
9/30	Interest Expense	128,000
	Cash		128,000

*3,200,000 x .08 x = 128,000