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 1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar pald $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. 12. 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 pald 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 pald. 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. T

Answer 1

Tristar Production Credit in $ Journal Enteries Date Particulars 1.9.2021 Land a/c Dr. Building a/c Dr. To Cash (Acquired Land and Buidling) Debit in $ 62500 37500 Asset Land Building % of Total Initial Fair Value Fair Value Valuation 75000 62.5% 62500 45000 37.5% 37500 120000 100.0% 100000 100000 1.9.2021 Equipment a/c Dr. 37037 Discount on note payable a/c Dr. 2963 To Note payable 40000 (Equipment purchased on Note Payable) $37,037 PV(8%,1,0,40000) FV 40000 PMT 1 Rate 8 Dr. 2500 15.9.2021 Truck a/c To Revenue - donation of asset (Truck Donated) 2500 3000 18.9.2021 Organization cost expense a/c Dr. To Cash (Legal expense paid) 3000 15500 10.10.2021 Machinery a/c Dr. To Cash (Machinery purchased for cash) 15500 2.12.2021 Office equipment a/c Dr. 5500 To Common stock (Office Equipment purchased against common stock) 5500 20000 10.12.2021 Land a/c Dr. To Cash To Note payable (Tract of Land acquired) 2000 18000