Wildhorse 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 $310,000 cash. The following information was gathered. Description Machinery Equipment Initial Cost on Seller's Books $310,000 186,000 Depreciation to Date on Seller's Books $155,000 31.000 Book Value on Seller's Books $155,000 155,000 Appraised Value $279.000 93,000 Asset 3: This machine was acquired by making a $31,000 down payment and issuing a $93,000, 2-year, zero-interest-bearing note. The note is to be paid off in two $46,500 installments made at the end of the first and second years. It was estimated that the asset could have been purchased outright for $111.290. 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 $310,000 Accumulated depreciation to date of sale 124.000 Fair value of machinery traded 248,000 Cash received Fair value of machinery acquired 217,000 31,000 Asset 5: Equipment was acquired by issuing 100 shares of $25 par value common stock. The stock had a market price of $34 per share Construction of Building: A building was constructed on land purchased last year at a cost of $465,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Asset 5: Equipment was acquired by issuing 100 shares of $25 par value common stock. The stock had a market price of $34 per share. Construction of Building: A building was constructed on land purchased last year at a cost of $465,000. Construction began on February 1 and was completed on November 1. The payments to the contractor were as follows. Date 2/1 6/1 9/1 11/1 Payment $372,000 1.116,000 1.488,000 310,000 To finance construction of the building, a $1,860,000, 12% construction loan was taken out on February 1. The loan was repaid on November 1. The firm had $620,000 of other outstanding debt during the year at a borrowing rate of 8%. Rantha vetlannine Debit Credit Account Titles and Explanation Acquisition of Assets 1 and 2 Machinery 232500 Equipment 1 77500 Cash 310000 Acquisition of Asset 3 Machinery 111290 Discount on Notes Payable Cash 31000 93000 Notes Payable Acquisition of Asset 4 Machinery 162750 Accumulated Depreciation Machinery 124000 Cash 31000 Machinery 310000 Gain on Disposal of Machinery Acquisition of Asset 5 7750 Equipment 3400 Common Stock 2500 Acquisition of Asset 5 Equipment 3400 2500 Common Stock Paid in Capital in Excess of Par-Common Stock (To record acquisition of Office Equipment) 900 e Texthonk and Martin