Reference no: EM133156728

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.

1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $110,000 in cash for the property. According to appraisals, the land had a fair value of $78,000 and the building had a fair value of $52,000.

2. On September 1, Tristar signed a $41,000 noninterest-bearing note to purchase equipment. The $41,000 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 $2,600.

4. On September 18, the company paid its lawyer $3,500 for organizing the corporation.

5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $16,000 and $550 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 $5,600 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 $21,000. It paid $2,500 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.