Question

Tristar Production Company began operations on September 1, 2021. Listed below are a number of transactions that occurred during its first four months of operations. (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. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $210,000 in cash for the property. According to appraisals, the land had a fair value of $142,600 and the building had a fair value of $87,400.
2. On September 1, Tristar signed a $51,000 noninterest-bearing note to purchase equipment. The $51,000 payment is due on September 1, 2022. Assume that 9% is a reasonable interest rate.
3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,600.
4. On September 18, the company paid its lawyer $3,000 for organizing the corporation.
5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $26,000 and $1,050 in freight charges also were paid.
6. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $6,600 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 $31,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.

Required:

Prepare journal entries to record each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollars.)

Answer 1

Date	Particulars	Debit	Credit
1-Sep	Land (210000*142600/(142600+87400))	$130,200
	Building (210000*87400/(142600+87400))	$ 79,800
	Cash		$210,000
1-Sep	Equipment [PV(FV=51,000, PMT=0, n=1, i=9%)]	$ 46,789
	Discount on Note payable	$    4,211
	Note Payable		$ 51,000
15-Sep	Truck	$    3,600
	Revenue-Donation of asset		$    3,600
18-Sep	Organisation cost Expense	$    3,000
	Cash		$    3,000
10-Oct	Equipment (26000+1050)	$ 27,050
	Cash		$ 27,050
2-Dec	Office Equipment	$    6,600
	Common stock		$    6,600
10-Dec	Land	$ 31,000
	Cash		$    3,000
	Note payable		$ 28,000