Question

Tristar Production Company began operations on September 1, 2018. 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.) On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $230,000 in cash for the property. According to appraisals, the land had a fair value of $160,000 and the building had a fair value of $90,000. On September 1, Tristar signed a $53,000 noninterest-bearing note to purchase equipment. The $53,000 payment is due on September 1, 2019. Assume that 8% is a reasonable interest rate. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,800. On September 18, the company paid its lawyer $4,000 for organizing the corporation. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $28,000 and $1,150 in freight charges also were paid. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $6,800 normal cash price. The supplier agreed to accept 200 shares of the company's nopar common stock in exchange for the equipment. The fair value of the stock is not readily determinable. On December 10, the company acquired a tract of land at a cost of $33,000. It paid $4,000 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. (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

Sr. No.	Journal	debit	credit
1)	land(230000×64%)	147200
	Building (230000×36%)	82800
	To cash		230000
2)	Equipment	49074
	Discount on notes payble	3926
	To Notes payble		53000
	PV(FV = 53000, PMT =0 , n=1,i=8%)
3)	Truck	3800
	To revenue-donation of assets		3800
4)	organization cost expenses	4000
	To cash		4000
5)	Equipment	29150
	To cash		29150
6)	office equipment	6800
	To common stock		6800
7)	Land	33000
	To cash		4000
	To notes payble		29000

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