Truck #1 has a list price of $29,550 and is acquired for a cash payment of $27,3
ID: 2578456 • Letter: T
Question
Truck #1 has a list price of $29,550 and is acquired for a cash payment of $27,383. 2. Truck #2 has a list price of $31,520 and is acquired for a down payment of $3,940 cash and a zero-interest-bearing note with a face amount of $27,580. The note is due April 1, 2018. Vaughn would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. 3. Truck #3 has a list price of $31,520. It is acquired in exchange for a computer system that Vaughn carries in inventory. The computer system cost $23,640 and is normally sold by Vaughn for $29,944. Vaughn uses a perpetual inventory system. 4. Truck #4 has a list price of $27,580. It is acquired in exchange for 920 shares of common stock in Vaughn Corporation. The stock has a par value per share of $10 and a market price of $13 per share. Truck #1 has a list price of $29,550 and is acquired for a cash payment of $27,383. 2. Truck #2 has a list price of $31,520 and is acquired for a down payment of $3,940 cash and a zero-interest-bearing note with a face amount of $27,580. The note is due April 1, 2018. Vaughn would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. 3. Truck #3 has a list price of $31,520. It is acquired in exchange for a computer system that Vaughn carries in inventory. The computer system cost $23,640 and is normally sold by Vaughn for $29,944. Vaughn uses a perpetual inventory system. 4. Truck #4 has a list price of $27,580. It is acquired in exchange for 920 shares of common stock in Vaughn Corporation. The stock has a par value per share of $10 and a market price of $13 per share.Explanation / Answer
1. Trucks DR............. 27,383
Cash CR ................................27,383
2 Trucks DR ...........................29,038
Discount on notes payable......2,482
Cash.CR.................................................3940
Notes Payable.CR............................. 27,580
3TrucksDR ..............................29,944
Cost of Goods SoldDR............23,640
Inventory CR.......................................23,640
Sales RevenueCR.................................29,944
4TrucksDR.................................11,960
Common StocksCR..................................................9,200
Paid in Capital in Excess of par-Common Stocks CR 2,760
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