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Logan Industries purchased the following assets and constructed a building as well. All this was

done during the current year.

Asset 1: The exchanged machinery with an appraised value of $1,755,000, a recorded cost of

$2,700,000 and Accumulated Depreciation of $1,350,000. The acquired machinery has an

appraised value of $1,695,000, a recorded cost of $3,240,000, and Accumulated Depreciation of

$1,782,000. The company received $60,000 cash in the exchange. Assume depreciation has

already been updated and the exchange lacked commercial substance.

Assets 2 and 3: These assets were purchased as a lump sum for $104,000 cash. The following

information was gathered.

Description

Initial Cost on

Seller's Books

Machinery

Equipment

$ 100,000

$ 60,000

Depreciation to

Date on Seller's

Books

$ 50,000

$ 10,000

Book Value on

Seller's Books

Appraised

Value

$ 50,000

$ 50,000

$ 90,000

$ 30,000

Asset 4: An equipment with an appraised value of $3,000 was acquired by issuing 250 shares of

$4 par value ordinary shares. The shares have a market price of $11 per share.

Asset 5: This machine was acquired by making a $15,000 down payment and issuing a $25,000,

2-year, zero-interest-bearing note. The note is to be paid off in two $12,500 instalments made at

the end of the first and second years. It was estimated that the asset could have been purchased

outright for $35,900.

Instructions

Prepare the journal entries to record the acquisition of each of these assets. Please show your

calculations.

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