Question

Transactions during 2021 were as follows:

On January 2, 2021, machinery and equipment were purchased at a total invoice cost of $260,000, which included a $5,500 charge for freight. Installation costs of $27,000 were incurred.

On March 31, 2021, a small storage building was donated to the company. The person donating the building originally purchased it three years ago for $25,000. The fair value of the building on the day of the donation was $17,000

On May 1, 2021, expenditures of $50,000 were made to repave parking lots at Pell's plant location. The work was necessitated by damage caused by severe winter weather. The repair doesn't provide future benefits beyond those originally anticipated

On November 1, 2021, Pell acquired a tract of land with an existing building in exchange for 10,000 shares of Pell's common stock that had a market price of $38 per share. Pell paid legal fees and title insurance totaling $23,000. Shortly after the acquisition, the building was razed at a cost of $35,000 in anticipation of new building construction in 2022.

On December 31, 2021, Pell purchased a small storage building by giving $15,250 cash and an old automobile purchased for 18,000 in 2014 Depreciation on the old automobile recorded through December 31, 2021, totaled $13,500. The fair value of the old automobile was $3,750

Required:

Prepare Journal Entries for the above transactions. Please show all calculations

Answer 1

Date	Accounts and Explanation	Debit	Credit
2021
Jan. 2	Equipment	$292,500		($260,000 + $5,500 + $27,000)
	Cash		$292,500
	(To record purchase of equipment and paid freight & installation cost)
Mar 31	Building	$17,000
	Donation received		$17,000
	(To record receive of building as a donation)
May 1	Repair and Maintenance	$50,000
	Cash		$50,000
	(To record expenditures were made to repave parking)
Nov 1	Land	$380,000
	Common Stock		$100,000	(10,000 x $10)
	Additional Paid-in Capital - Common Stock		$280,000	(10,000 x $28)
Nov 1	Land	$23,000
	Cash		$23,000
Nov 1	New Building	$35,000
	Cash		$35,000
Dec 31	Building	$19,000
	Accumulated Depreciation	$13,500
	Loss	$750		($18,000 - $13,500) - $3,750
	Cash		$15,250
	Vehicle		$18,000