nt ULATOR MESSAGE MY INSTRUCTOR FULL SCREENPRINTER VERSION BACK , Exercise 10-3

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nt ULATOR MESSAGE MY INSTRUCTOR FULL SCREENPRINTER VERSION BACK , Exercise 10-3 es a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2017. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of SS2,950 and is acquired for a cash payment of $49,067. 2. Truck #2 has a list price of $56 480 and is acquired for a down payment of $7 060 cash and zero interest bearin note ece amount of g i lite due , 2018. Teal would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borowing rate of 8% 3. Trud e3 has a list price of $56,-480. Itis acquired in exchange for a computer system that Teal carries in inventory. The computer system cost $42,360 and is normally sold by 4. Truck 44 has a list price of $49,420. It is acquired in exchange for 960 shares of common stock in Teal Corporation. The stock has a par value per share of $10 and a market Teal for $53,656. Teal uses a perpetual inventory system price of $13 per share. Prepare the appropriate journal entries for the above transactions for Teal Corporation. (Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manualiy. It no entry is required, select No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit

Explanation / Answer

JOURNAL ENTRIES:

Debit Credit 1 Trucks 49,067 Cash 49,067 2 Trucks 52,399.45 Discount on Notes Payable 4080.55 Cash 7,060 Notes Payable 49,420 PV of $49420 @ 9% for 1 year ; (49420 * 0.9174 = 45,339.45) 45339.45+7060=52399.45; 45,339.45 * 9% 3 Trucks 53,656 Cost of Goods Sold 42,360 Inventory 42,360 Sales 53,656 4 Trucks 12,480 Common Stock 9,600 Paid-In-Capital 2,880 (960 *13 = 12480)

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