Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. The equipment was purchased on account for $34,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. 2. Connors gave the seller a noninterest-bearing note. The note required payment of $36,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 12% properly reflects the time value of money in this situation. 3. Connors traded in old equipment that had a book value of $10,500 (original cost of $23,000 and accumulated depreciation of $12,500) and paid cash of $31,000. The old equipment had a fair value of $6,100 on the date of the exchange. The exchange has commercial substance. 4. Connors issued 1,500 shares of its no-par common stock in exchange for the equipment. The market value of the common stock was not determinable. The equipment could have been purchased for $33,000 in cash. Required: For each of the above situations, prepare the journal entry required to record the acquisition of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to
the acquisition of the equipment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the tables provided.)
1. The equipment was purchased on account for $34,000. Credit terms were 2/10, n/30. Payment was made within the discount period
and the company records the purchases of equipment net of discounts.
2. Connors gave the seller a noninterest-bearing note. The note required payment of $36,000 one year from date of purchase. The
fair value of the equipment is not determinable. An interest rate of 12% properly reflects the time value of money in this situation.
3. Connors traded in old equipment that had a book value of $10,500 (original cost of $23,000 and accumulated depreciation of
$12,500) and paid cash of $31,000. The old equipment had a fair value of $6,100 on the date of the exchange. The exchange has
commercial substance.
4. Connors issued 1,500 shares of its no-par common stock in exchange for the equipment. The market value of the common stock
was not determinable. The equipment could have been purchased for $33,000 in cash.
Required:
For each of the above situations, prepare the journal entry required to record the acquisition of the equipment. (If no entry is required
for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole
dollar amount.)
Transcribed Image Text:Connors Corporation acquired manufacturing equipment for use in its assembly line. Below are four independent situations relating to the acquisition of the equipment. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. The equipment was purchased on account for $34,000. Credit terms were 2/10, n/30. Payment was made within the discount period and the company records the purchases of equipment net of discounts. 2. Connors gave the seller a noninterest-bearing note. The note required payment of $36,000 one year from date of purchase. The fair value of the equipment is not determinable. An interest rate of 12% properly reflects the time value of money in this situation. 3. Connors traded in old equipment that had a book value of $10,500 (original cost of $23,000 and accumulated depreciation of $12,500) and paid cash of $31,000. The old equipment had a fair value of $6,100 on the date of the exchange. The exchange has commercial substance. 4. Connors issued 1,500 shares of its no-par common stock in exchange for the equipment. The market value of the common stock was not determinable. The equipment could have been purchased for $33,000 in cash. Required: For each of the above situations, prepare the journal entry required to record the acquisition of the equipment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)
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