Review View Table Design Layout AaBbCcDdE AaBbCcDdE AaBbCcl Aab No Spacing He 8

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Review View Table Design Layout AaBbCcDdE AaBbCcDdE AaBbCcl Aab No Spacing He 8 9 1011 12 14 15 17 18 groups of two or three. Question 1 On January 1, 2018, JKJ purchased a 1,000-acre farm with a building. The asking price was $2,600,000. Approximately 15 percent of the total value of the farm was allocable to the building and the balance of the purchase to ranch improvements. Payment in full was made as follows: Cash, $980,084, 50,000 shares JKJ common shares (market S25 per share based on several recent large market exchanges) and a $500,000 non- interest-bearing note payable in full on December 31, 2020 (market interest rate, 8 percent). Required: Give the journal entry for JKJ to record this purchase (rounded to the nearest dollar) General Journal Date Account Titles and Explanation Debit Credit Question 2 A new machine was acquired by JR that had a quoted price of $12,000. JR paid $3,000 cash and d 200 shares common shares (current market value, $40 per share, based on several recent large trading transactions.). Other payments related to the acquisition were: transportation, $300; refundable sales tax, SI and installation costs, $600. $11,900 Required: The asset account should be debited for S

Explanation / Answer

Solution for Question 1 and Question 2:-

Journal Entry in the Books JKJ Date Account Desription , Title Debit Credit 01/01/2018 Building ( $2627000*15%) $394,050 Ranch Improvement $2,232,950 Cash $980,084 Note Payable $396,916 Common Stock-Par Value (50000Share*$10) $500,000 Paid in excess of Par Value $750,000 To Record Acquistion of Asset Note: Assume that Par value of Common stock =$10 working Note : Computation of Total consideration paid for acquistion 1 Cash $980,084 2 Common Share ( 50000 Share *$25) $1,250,000 3 Note Payable( $500000/1.08^3) $396,916 Total $2,627,000 solution for 2: Computation of amount debited in Asset Account 1 Cash $3,000 2 Common Share ( 200 Share *$40) $8,000 3 Transportation Charges Paid $300 4 Installation Cost $600 5 Refundable Sales tax( Refundable) - Total amout $11,900

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