Question

At January 1, 2022, Wildhorse Co. reported the following property, plant, and equipment accounts:

Accumulated depreciation—buildings		$61,350,000
Accumulated depreciation—equipment		54,700,000
Buildings		97,200,000
Equipment		150,300,000
Land		20,150,000

The company uses straight-line depreciation for buildings and equipment, its year-end is December 31, and it makes adjusting entries annually. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value.

During 2022, the following selected transactions occurred:

Apr. 1		Purchased land for $4.30 million. Paid $1.075 million cash and issued a 3-year, 6% note payable for the balance. Interest on the note is payable annually each April 1.
May 1		Sold equipment for $210,000 cash. The equipment cost $3.30 million when originally purchased on January 1, 2014.
June 1		Sold land for $5.04 million. Received $750,000 cash and accepted a 3-year, 5% note for the balance. The land cost $1.20 million when purchased on June 1, 2016. Interest on the note is due annually each June 1.
July 1		Purchased equipment for $2.00 million cash.
Dec. 31		Retired equipment that cost $1 million when purchased on December 31, 2012. No proceeds were received.

(a)

Journalize the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation

Answer 1

Requirement (a):

Date	Account title and explanation	Debit	Credit
Apr.1	Land	$4,300,000
	Cash		$1,075,000
	Notes payable		$3,225,000
	[To record purchase of land]
May 1	Deperciation expense [$3,300,000/10] x 4/12	$110,000
	Accumulated depreciation-Equipment		$110,000
	[To record depreciation expense]
	Cash	$210,000
	Accumulated depreciation-Equipment [($3,300,000/10) x 8 years + $110,000]	$2,750,000
	Loss on sale of equipment	$340,000
	Equipment		$3,300,000
	[To record sale of equipment]
June 1	Cash	$750,000
	Notes receivable	$4,290,000
	Land		$1,200,000
	Gain on sale of land		$3,840,000
	[To record sale of land]
July 1	Equipment	$2,000,000
	Cash		$2,000,000
	[To record purchase of equipment]
Dec 31	Depreciation expense [$1,000,000/10]	$100,000
	Accumulated depreciation-Equipment		$100,000
	[To record depreciation expense]
	Accumulated depreciation-equipment	$1,000,000
	Equipment		$1,000,000
	[To record retirement of equipment]