(Entries for Acquisition of Assets) Presented below is information related to Rommel Company.
1. On July 6, Rommel Company acquired the plant assets of Studebaker Company, which had discontinued operations. The appraised value of the property is:
|
Land |
$ 400,000 |
|
Buildings |
1,200,000 |
|
Equipment |
800,000 |
|
Total |
$2,400,000 |
Rommel Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a fair value of $180 per share on the date of the purchase of the property.
2. Rommel Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building.
|
Repairs to building |
$105,000 |
|
Construction of bases for machinery to be installed later |
135,000 |
|
Driveways and parking lots |
122,000 |
|
Remodeling of office space in building, including new partitions and walls |
161,000 |
|
Special assessment by city on land |
18,000 |
3. On December 20, the company paid cash for machinery, $280,000, subject to a 2% cash discount, and freight on machinery of $10,500.
Instructions
Prepare entries on the books of Rommel Company for these transactions.