Question

Exercise 10-03 Your answer is partially correct. Try again Nash 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 $20,550 and is acquired for a cash payment of $19,043. 2. Truck #2 has a list price of $21,920 and is acquired for a down payment of $2,740 cash and a zero-interest-bearing note with a face amount of $19,180. The note is due April 1, 2021. Nash 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 $21,920. It is acquired in exchange for a computer system that Nash carries in inventory. The computer system cost $16,440 and is normally sold by Nash for $20,824. Nash uses a perpetual inventory system 4. Truck #4 has a list price of $19,180. It is acquired in exchange for 1,090 shares of common stock in Nash 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 Nash Corporation. (Round present value factors to 5 decimal places, e.q. 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 0 for the amounts.) No. Account Titles and Explanation Debit Credit 1. T19,043 Ttrucks T19,043 TCash 2. Ttrucks Discount on Notes Payable 2,740 TCash TNotes Payable T19,180 3. Trucks T20,824| TCost of Goods Sold T16,440 TInventory T16,440 Sales Revenue 20,824 4. trucks 14170 11090 TCommon Stock Paid-in Capital in Excess of Par-Common Stock T IT13080

Answer 1

No	Account Titles and Explanation	Debit	Credit
1	Trucks	$19,043
	Cash		$19,043
2	Trucks	$20,176
	Discount on Notes Payable	$1,744		($19,180 - $19,180/1.10)
	Cash		$2,740
	Notes Payable		$19,180
3	Trucks	$20,824
	Cost of Goods Sold	$16,440
	Inventory		$16,440
	Sales Revenue		$20,824
4	Trucks	$14,170
	Common Stock		$10,900	(1,090 x $10)
	Paid-in Capital in Excess of Par - Common Stock		$3,270	(1,090 x $3)