Prepare journal entries to record the transactions

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Reference no: EM132785970

Question - Space1, Space2 and Space3 contribute to a joint operation in order to build a spacecraft that will provide moving services from the earth to another planet, called NewEarth, which resembles the earth but where people do not have to work or study or write exams. 1. The spacecraft costs $15 billion with an estimated useful life of 8 years with zero residual value. 2. Space1 Corp. contributes $5 billion cash for a 33% interest. 3. Space2 Corp contributes key parts and components for a 40% interest; Parts and components cost Space2 $3.5 billion and are worth $6 billion on the market. 4. Space3 will do the final assembly and do test flight for the remaining interest. 5. $2.8 billion service revenue is generated during the first year the spacecraft becomes operational. 6. The joint operations pay $9,000,000 annually to another company which provides marketing and manages daily operations after the spacecraft is ready for service.

Required - Prepare journal entries to record the above transactions. Also, indicate which fund will be used for each entry.

Reference no: EM132785970

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