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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 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.

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