Welcome, Guest

Want to take part in these discussions? If you have an account, sign in now.

If you don't have an account, apply for one now.

1. • CommentAuthorpalal9923
   • CommentTimeAug 8th 2007

    
   Prepare the appropriate journal entries for the foregoing transactions.
   Background info: Company A operates a retail computer store. To improve delivery services to customers, the company purchases 4 new trucks on april 1, 2007. The terms for each truck are described below.
   
   1. Truck #1 has a list price of 15,000 and is acquired for cash payment of 13,900.
   2. Truck #2 has a list price of 16,000 and is acquired for a down payment of 2,000 cash and zero interest bearing note with a face amount of 14,000. The note is due April 1, 2008. Company A would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%
   3. Truck #3 ha s a list price of 16,000. It is acquired in exchange for a computer system that company A caries in its inventory. The computer system cost 12,000 and is normally sold by Company A for 15,200.
   4. Truck #4 has a list price of 14,000. It is acquired in exchange for 1,000 shares of common stock in Company A. The stock has a par value per share of 10 and market value share of 13.