Entries for Acquisition of Assets Presented below are information related to Rommel Company. 1. On July 6

Question:

Entries for Acquisition of Assets Presented below are 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

Building 1,200,000

Machinery and 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 market 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. Prepare entries on the books of Rommel Company for these transactions.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...