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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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