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 $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.
2. On September 1, Tristar signed a $53,000 noninterest-bearing note to purchase equipment. The $53,000 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 $3,800.
4. On September 18, the company paid its lawyer $4,000 for organizing the corporation.
5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $28,000 and $1,150 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 $6,800 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 $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

Serial No.	Date	account Titles	Debit	credit
1.	Sep 1	land*	147200
		Building**	82800
		Cash		230000
		( Acquired land and building )
2.	Sep 1	equipment (PV of 8%) (53000/1.08)	49074
		Discount on notes payable	3926
		Notes payable		53000
		(To record equipment purchase)
3.	Sep15	Truck	3800
		Revenue:donation of asset		3800
		( truck donated )
4.	Sep18	organization cost expenses	4000
		Cash		4000
		( Legal exp paid )
5.	Oct10	Machinery	29150
		Cash		29150
		(Machinery purchased)
6.	Dec2	office equipment	6800
		Common stock		6800
		( Office Equipment purchaes against common stock )
7.	Dec 10	land	33000
		Cash		4000
		Notes payable		29000
		(Being tract land acquired by paying 4000down and for remaining a 10% note has been raised payable within a year )
		*land=160000 /250000× 230000=147200 **Building=90000 /250000× 230000 =82800