Wu Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2020. The terms of acquisition for each truck were as follows:

1. Truck #1 had a list price of $27,000 and was acquired for a cash payment of $23,900.

2. Truck #2 had a list price of $28,000 and was acquired for a down payment of $2,000 cash and a non–interest-bearing note with a face amount of $26,000. The note is due April 1, 2021. Wu 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 had a list price of $25,000. It was acquired in exchange for a computer system that Wu carries in inventory. The computer system cost $16,500 and is normally sold by Wu for $21,000. Wu uses a perpetual inventory system.

4. Truck #4 had a list price of $26,000. It was acquired in exchange for 1,000 common shares of Wu Inc. The common shares trade in an active market valued at $23 per share in the most recent trade.

Instructions

a. Prepare the appropriate journal entries for Wu Inc. for the above transactions, assuming that Wu prepares financial statements in accordance with IFRS. If there is some uncertainty about the amount, give reasons for your choice. For Truck #2, calculate the purchase price using any of the three methods (tables, financial calculator, or Excel).

b. Would the journal entries for transaction 4 prepared in part (a) differ if Wu prepared financial statements in accordance with ASPE?