Question

Your answer is partially correct. Try again. Concord Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2020. The terms of acquisition for each truck are described below. 1. Truck #1 has a list price of $58,350 and is acquired for a cash payment of $54,071. 2. Truck #2 has a list price of $62,240 and is acquired for a down payment of $7,780 cash and a zero-interest-bearing note with a face amount of $54,460. The note is due April 1, 2021. Concord 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 has a list price of $62,240. It is acquired in exchange for a computer system that Concord carries in inventory. The computer system cost $46,680 and is normally sold by Concord for $59,128. Concord uses a perpetual inventory system. 4. Truck #4 has a list price of $54,460. It is acquired in exchange for 1,040 shares of common stock in Concord Corporation. The stock has a par value per share of $10 and a market price of $13 per share. Prepare the appropriate journal entries for the above transactions for Concord Corporation. (Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. Trucks 54071 T Cash 54071 2. Trucks TDiscount on Notes Payable T Cash 7780 T Notes Payable 54460

Answer 1

Answer Item Credit Debit $54,071 Account Titles & Explanation Trucks Cash (To record the acquisition of Truck) $54,071 2 $57,289.04 $4,950.96 Trucks Discount on Notes Payable ($54,460 - $49,509.04) Cash Note Payable (To record the acquisition of Truck) $7,780 $54,460 3 $59,128 $46,680 Trucks Cost of Goods Sold Inventory Sales Revenue (To record the acquisition of Truck) $46,680 $59,128 $13,520 $10,400 $3,120 4 Trucks Common Stock (1,040 shares x $10 per share) Paid-in Capital in Excess of Par-Common Stock (1,040 x ($13 - $10)] (To record the acquisition of Truck) Explanations Item 2 PV of $54,460 @ 10% for 1 year = $54,460 x 0.90909 = $49,509.04 Cost of Truck = $49,509.04 + $7,780 = $57,289.04