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Tristar Production Company began operations on September 1, 2024. 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 $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. 2. On September 1, Tristar signed a $47,000 noninterest-bearing note to purchase equipment. The $47,000 payment is due on September 1, 2025. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,200. 4. On September 18, the company paid its lawyer $6,500 for organizing the corporation. 5. On October 10, Tristar purchased equipment for cash. The purchase price was $22,000 and $850 in freight charges also were paid. 6. On December 2, Tristar acquired equipment. The company was short of cash and could not pay the $6,200 normal cash price. The supplier agreed to accept 200 shares of the company's no-par 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 $27,000. It paid $5,500 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.

Tristar Production Company began operations on September 1, 2024. 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 $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. 2. On September 1, Tristar signed a $47,000 noninterest-bearing note to purchase equipment. The $47,000 payment is due on September 1, 2025. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,200. 4. On September 18, the company paid its lawyer $6,500 for organizing the corporation. 5. On October 10, Tristar purchased equipment for cash. The purchase price was $22,000 and $850 in freight charges also were paid. 6. On December 2, Tristar acquired equipment. The company was short of cash and could not pay the $6,200 normal cash price. The supplier agreed to accept 200 shares of the company's no-par 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 $27,000. It paid $5,500 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.

FINANCIAL ACCOUNTING
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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Tristar Production Company began operations on September 1, 2024. 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 $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. 2. On September 1, Tristar signed a $47,000 noninterest-bearing note to purchase equipment. The $47,000 payment is due on September 1, 2025. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,200. 4. On September 18, the company paid its lawyer $6,500 for organizing the corporation. 5. On October 10, Tristar purchased equipment for cash. The purchase price was $22,000 and $850 in freight charges also were paid. 6. On December 2, Tristar acquired equipment. The company was short of cash and could not pay the $6,200 normal cash price. The supplier agreed to accept 200 shares of the company's no-par 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 $27,000. It paid $5,500 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. Note: Use tables, Excel, or a financial calculator. 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. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list Journal entry worksheet 1 Date September 01 2 Record entry 3 Land Building Cash 4 On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. Note: Enter debits before credits. 5 General Journal Clear entry 6 7 Debit Credit View general journal
Transcribed Image Text:Tristar Production Company began operations on September 1, 2024. 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 $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. 2. On September 1, Tristar signed a $47,000 noninterest-bearing note to purchase equipment. The $47,000 payment is due on September 1, 2025. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,200. 4. On September 18, the company paid its lawyer $6,500 for organizing the corporation. 5. On October 10, Tristar purchased equipment for cash. The purchase price was $22,000 and $850 in freight charges also were paid. 6. On December 2, Tristar acquired equipment. The company was short of cash and could not pay the $6,200 normal cash price. The supplier agreed to accept 200 shares of the company's no-par 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 $27,000. It paid $5,500 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. Note: Use tables, Excel, or a financial calculator. 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. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) View transaction list Journal entry worksheet 1 Date September 01 2 Record entry 3 Land Building Cash 4 On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $170,000 in cash for the property. According to appraisals, the land had a fair value of $125,400 and the building had a fair value of $64,600. Note: Enter debits before credits. 5 General Journal Clear entry 6 7 Debit Credit View general journal
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