Question

Vaughn Corporation operates 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.

Answer 1

Cost of Truck 2 $2,500 Present value of note Cost of Truck 2 $2,500 (17,500*1/1.09) Cost of Truck 2 $2,500 (17,500*0.91743) Cost of Truck 2 = $2,500 + 16,055 Cost of Truck 2 = $18,555 No Account Titles and Explanation Debit (S) Credit (S) 11 Truck #1 Cash 17,375 17,375 To record the purchase of truck for cash) 21 Truck #2 18,555 1,445 Discount on notes payable (17,500+2500 -18,555 Cash 2500 Notes payable 17,500 To record the purchase of truck by issuing a note) 3 Truck #3 19,000 15,000 Cost of goods sold Invento 15,000 19,000 Sales revenue To record the purchase of truck on exchange) 41 Truck #4 12,220 Common stock (940 $10 Paid in capital in excess of par [940* ($13-$10)] 9,400 2,820 To record the purchase of truck on issuance of stock)