Acquisition Cost
Response to the following problem:
The following transactions of the Weber Company occurred during 2010:
1. The company acquired a tract of land in exchange for 1,000 shares of $10 par value common stock. The stock was traded on the New York Stock Exchange at $24 on the date of exchange. The land had a book value on the selling company's records of $5,000, and it was believed to be worth "anything up to $30,000."
2. An engine on a truck was replaced. The truck originally cost $10,000 three years ago and was being depreciated at $2,000 per year. The engine cost $1,000 to replace.
3. The company acquired a tract of land that was believed to have mineral deposits by issuing 500 shares of preferred stock of $50 par value. The preferred stock was rarely traded. The last transaction was two months earlier, when 50 shares were sold at $75 per share. The owner of the land was willing to accept cash of $55,000, and an appraisal had shown a value of $60,000.
4. The company purchased a machine with a list price of $8,500 by issuing a two-year, $10,000 non-interest-bearing note when the market rate of interest was 10%.
Required:
Prepare journal entries to record the preceding events.