F 4 Please explain in detail...... Acquisition of Asset 5EquipmentCommon StockPaid-in Capital in Excess of Par - Common Stock(To record acquisition of Office Equipment)BuildingsCashInterest Payable3500TIL2600900 Asset 5: Equipment was acquired by issuing 100 shares of $26 par value common stock. The stock had a market price of $35 pershare.Construction of Building: A building was constructed on land purchased last year at a cost of $480,000. Construction began onFebruary 1 and was completed on November 1. The payments to the contractor were as follows.Date2/1Payment$384,0006/1 1,152,0009/1 1,536,00011/1320,000To finance construction of the building, a $1,920,000, 12% construction loan was taken out on February 1. The loan was repaid onNovember 1. The firm had $640,000 of other outstanding debt during the year at a borrowing rate of 8%.

Acquisition of asset 5 In this case the office equipment should be placed on Heyes's books at the…

Answered: Acquisition of Asset 5 Equipment Common…

Acquisition of Asset 5 Equipment Common Stock Paid-in Capital in Excess of Par - Common Stock (To record acquisition of Office Equipment) Buildings Cash Interest Payable 3500 [II 2600 900

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 6: Durian Ltd. owns an office building which it uses for administrative purposes with a depreciated historical cost of $2 million on 1 July 20x5, a useful life of 20 years. The company adopts the revaluation model for its office building and records revaluations using the netting method as well amortizes revaluation surplus annually. Indicators of impairment and/or reversal of impairment existed at 30 June 20x6, 20x7 and 20x8. The information below shows relevant asset measurements at various dates: Year ended 30 June Fair value Cost of disposal Value-in-use 20x6 $1,700,000 $85,000 $1,550,000 20x7 $1,400,000 $80,000 $1,350,000 20x8 $1,428,000 $128,000 $1,310,000 4 |Page After a reorganisation on 1 January 20x9, this property was let to a third party and reclassified as an investment property applying Durian's policy of the fair value model. An independent valuer assessed the property to have a fair value of $1.8 million at 1 January 20x9, which had risen to $1.9 million at 30…