Your solution should be in good form with amounts clearly labeled and should use appropriate account titles.

Consider each of the transactions below. All of the expenditures were made in cash.

1. The Edison Company spent $12,000 during the year for experimental purposes in connection with the development of a new product.
2. On September 1, 2011, Tristar signed a $40,000 noninterest-bearing note to purchase equipment. The $40,000 payment is due on September 1, 2012. Assume that 8% is a reasonable interest rate. The present value factor of $1: n-1, i=8% is 0.92593
3. The Mayer Company, plaintiff, paid $12,000 in legal fees in November, in connection with a successful infringement suit on its patent.
4. The Johnson Company traded its old machine with an original cost of $7,400 and a book value of $3,000 plus cash of $8,000 for a new one that had a fair value of $10,000.
5. On September 1, 2011, Tristar Company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $200,000 in cash for the property. According to appraisals, the land had a fair market value of $125,000 and the building had a fair market value of $85,000. Please record the acquisition of the land and the building.