with an estimated fair value of $ 5,000. Mehta also paid $ 3,000 cash in the transaction. Prepare the journal entry to record the exchange.
3) Ottawa Corporation owns machinery that cost $ 20,000 when purchased on July 1, 2011. Depreciation has been recorded at a rate of $ 2,400 per year, resulting in a balance is accumulated depreciation of $ 8,400 at December 31, 2014. The machinery is sold on September 1, 2015, for $ 10,500. Prepare journal entries to( a) update depreciation for 2015 and( b) record the sale.
4) Martin Buber co. purchased land as a factory site for $ 400,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $ 42,000 to raze the old buildings and salvaged lumber and brick for $ 6,300. Legal fees of $ 1,850 were paid for title investigation and drawing the purchase contract. Martin Buber paid $ 2,200 to an engineering firm for a land survey, and $ 68,000 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $ 1,500, and a liability insurance premium paid during construction was $ 900. The contractor’ s charge for construction was $ 2,740,000. The company paid the contractor in two installments:$ 1,200,000 at the end of 3 months and $ 1,540,000 upon completion. Interest costs of $ 170,000 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buberk Co. assumes that the land survey was for the building.
5) Ben Sisko Supply Company, a newly formed corporation, incurred the following expenditure related to land, to Buildings, and to machinery and equipment. Determine the amounts that should be debited to land, to buildings, and to machinery and equipment. Assume the benefits of capitalizing interest during construction exceed the cost of implementation.