Fong Corp. reported various transactions in 20X2:

a. Equipment with an original cost of $32,500 and accumulated depreciation of $26,000 was deemed unusable and was sold for $250 scrap value.

b. A new machine was acquired for $37,850. The invoice was marked 2/10, n/30, but Fong did not pay in time to take advantage of the 2% discount for early payment and thus paid the gross amount of $37,850. Wiring was improved to accommodate the needs of the new machinery at a cost of $250. Related software to install in the machine required for operation was purchased for $1,500. Installation of the new machinery cost $1,250.

There were no component parts with different useful lives, so the machine was recorded on one account.

c. Regular machine maintenance was carried out for $11,000.

d. A major overhaul was done on heavy machinery for a cost of $37,500. This overhaul is expected to be completed every five years.

e. The building roof was replaced during the period at a cost of $22,400 to improve the insulation in the building and save on heating costs. The old roof had been recorded as a separate component. It had an original cost of $10,200 and was three quarters depreciated.

f. Two machines were acquired for a lump sum amount of $26,900. One machine had an appraised value of $20,000 and the other, $10,000.

g. Land and building were acquired from a member of the board of directors in exchange for 325,000 of the company’s own common shares. The land was appraised at $37,500 and the building, $200,000. The facility will be used for long term storage. The market value of common shares has been around $1.25 per share this year, with weekly highs and lows ranging from $1.80 to $0.50, respectively.

h. The company spent $315,000 in a research lab program this year. It was successful in developing three new commercial projects, which represented $122,000 of the expenditures budget. Legal fees associated with the three successful projects amount to $27,500.

i. Fong paved its factory parking lot, previously a dirt lot, at a cost of $80,050.

Required:

Prepare journal entries to record the transactions listed above. State any assumptions made.