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.)

1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $210,000 in cash for the property. According to appraisals, the land had a fair value of $142,600 and the building had a fair value of $87,400.
2. On September 1, Tristar signed a $51,000 noninterest-bearing note to purchase equipment. The $51,000 payment is due on September 1, 2019. Assume that 9% is a reasonable interest rate.
3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,600.
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 $26,000 and $1,050 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 $6,600 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.
7. On December 10, the company acquired a tract of land at a cost of $31,000. It paid $3,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note.

Answer 1

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Date	account	Debit	Credit
1	Land	$130,200
	Building	$ 79,800
	Cash		$           210,000
	(being land and building purchased)
Asset	Fair Value	Ratio	Value allocated
			(210000*Ratio)
Land	$                                                                                142,600	0.62	$           130,200
Building	$                                                                                  87,400	0.38	$             79,800
	$                                                                                230,000		$           210,000
2	Equipment (51,000*0.917431)	$ 46,789
	Discount on Note Payable	$    4,211
	Note Payable		$             51,000
	(being equipment purchased)
	PV (n=1,r=9%)	0.917431
3	Truck	$    3,600
	Revenue-Donation		$               3,600
	(being truck received in donation)
4	Organization Expense	$    3,000
	Cash		$               3,000
	(being organization expense paid)
5	Maintenance Equipment (26000+1050)	$ 27,050
	Cash		$             27,050
	(being cash paid for equipment)
6	Office Equipment	$    6,600
	Common Stock		$               6,600
	(Being equipment purchase in exchange of 200 shares)
7	Land	$ 31,000
	Cash		$               3,000
	Note Payable		$             28,000
	(being land purchased)