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Exercise 10-3

Ivanhoe 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.

1.Truck #1 has a list price of $16,950and is acquired for a cash payment of $15,707.

2.Truck #2 has a list price of $18,080and is acquired for a down payment of $2,260cash and a zero-interest-bearing note with a face amount of $15,820. The note is due April 1, 2018. Ivanhoe would normally have to pay interest at a rate of9% for such a borrowing, and the dealership has an incremental borrowing rate of8%.

3.Truck #3 has a list price of $18,080. It is acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $13,560and is normally sold by Ivanhoe for $17,176. Ivanhoe uses a perpetual inventory system.

4.Truck #4 has a list price of $15,820. It is acquired in exchange for1,030shares of common stock in Ivanhoe Corporation. The stock has a par value per share of $10and a market price of $13per share.

Prepare the appropriate journal entries for the above transactions for Ivanhoe Corporation.(Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 0 decimal places, e.g. 5,275. 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.)

S Kieso, Intermediate Accounting, 16e Help | System Announcements CALCULATOR PRINTER VERSION BACK NEXT Exercise 10-3 Ivanhoe 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. 1. Truck #1 has a list price of $16,950 and is acquired for a cash payment of $15,707. 2. Truck #2 has a list price of $18,080 and is acquired for a down payment of $2,260 cash and a zero-interest-bearing note with a face amount of $15,820. The note is due April 1, 2018. Ivanhoe 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 $18,080. It is acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $13,560 and is normally sold by Ivanhoe for $17,176. Ivanhoe uses a perpetual inventory system. . Truck #4 has a list price of $15,820. It is acquired in exchange for 1,030 shares of common stock in Ivanhoe 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 Ivanhoe Corporation. ( Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 0 decimal places, e.g. 5,275. 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. 2. 3