Reference no: EM133012235
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.
-On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $130,000 in cash for the property. According to appraisals, the land had a fair value of $93,000 and the building had a fair value of $57,000.
-On September 1, Tristar signed a $43,000 noninterest-bearing note to purchase equipment. The $43,000 payment is due on September 1, 2022. Assume that 10% is a reasonable interest rate.
-On September 15, a truck was donated to the corporation. Similar trucks were selling for $2,800.
-On September 18, the company paid its lawyer $4,500 for organizing the corporation.
-On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $18,000 and $650 in freight charges also were paid.
-On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $5,800 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.
-On December 10, the company acquired a tract of land at a cost of $23,000. It paid $3,500 down and signed a 12% note with both principal and interest due in one year. Twelve percent is an appropriate rate of interest for this note.
Required - Prepare journal entries to record each of the above transactions.