Question

Problem 10-1 (Static) Acquisition costs [LO10-1, 10-2, 10-3, 10-4) 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 S1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of SD (Use appropriate factors from the tables provided.): 8 1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $100.000 in cash for the property. According to appraisals, the land had a fair value of $75,000 and the building had a fair value of $45,000 2. On September 1, Tristar signed a $40,000 noninterest-bearing note to purchase equipment. The $40,000 payment is due on September 1, 2022. Assume that 8% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $2.500. 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 $15,000 and $500 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 $5,500 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 $20,000. It paid $2,000 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 ences 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.) View transaction list Journal entry worksheet 5 6 7 4 1 2 3 3 of 6 !! No > < Prey

Answer 1

Date	Entries & Explanation	Debit	Credit
01-09-2021	Debit Land a/c Debit Building a/c Credit cash a/c Credit Capital reserve a/c ( Being Land Purchased )	75000 45000	100000 20000
01-09-2021	Debit Equipment a/c Credit non int bearing note a/c (Being non int bearing note has been raised payable after one year)	40000	40000
15-09-2021	No entry will be passed as it is in the form of donation
18-09-2021	Debit Legal fees a/c Credit Bank a/c ( being Professional charges paid to lawyer )	3000	3000
10-10-2021	Debit maintenance equipment a/c Debit Freight exp a/c Credit Cash a/c (being Maintenance equipment purchased for cash )	15000 500	15500
02-12-2021	Debit Office equipment a/c Credit Common stock a/c (being office equip has been purchased in return for companies 200shares)	5500	5500
10-12-2021	Debit Land a/c Credit Cash a/c Credit 10% Note a/c (Being tract land acquired by paying 2000 down and for remaining a 10% note has been raised payable within a year )	20000	2000 18000

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