Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tristar Production Company began operations on September 1, 2018. Listed below are a number of transactions that occurred during its first four months of operations.

image text in transcribed
Tristar Production Company began operations on September 1, 2018. Listed below are a number of transactions that occurred during its first four months of operations. 1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $100,000 in cash for the property. According to appraisals, the land had a fair value of $75,000 and the building had a fair value of $45.000 2. On September 1, Tristar signed a $40,000 noninterest-bearing note to purchase equipment. The $40,000 payment is due on September 1, 2019. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,500. 4. On September 18, the company paid its lawyer $3,000 for organizing the corporation. Page 564 5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $15,000 and $500 in freight charges also were paid. 6. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,500 normal cash price. The supplier agreed to accept 200 shares of the company's nopar common stock in exchange for the equipment. The fair value of the stock is not readily determinable. 7. On December 10, the company acquired a tract of land at a cost of $20,000. It paid $2,000 down and signed a 10% note with both principal and interest due in one year. Ten percent is an appropriate rate of interest for this note. Required: Prepare journal entries to record each of the above transactions

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bank Performance, Risk And Firm Financing

Authors: P. Molyneux

1st Edition

0230313353, 9780230313354

More Books

Students also viewed these Accounting questions

Question

How will you capitalize on student interests about weather lesson

Answered: 1 week ago