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E10-3 (LO1) Acquisition Costs of Trucks KellyClarkson Corporation operates aretail computer store. To improvedelivery servicesto customers, the company purchases four new trucksonApril 1, 2020. The termsofacquisition for each truck are described below. Instructions: Prepare the appropriate journal entries for the above transactions for Clarkson Corporation. Debit Credit 1. Truck #1 List price $ 15,000 Cash acquisition cost 13,900 2. Truck #2 List price $ 16,000 Hint: Use the Excel Present Value formula. 2 Acquisition cost Cash downpayment 2,000 14,000 Face amount of zero-interest bearing note assumed Note duedate Normalinterest ratefor this borrowing April 1, 2021 10% Incremental borrowingrate 8% 3. Truck #3 List price $ 16,000 3. Acquired in exchangefor a computer system that Clarkson carries in inventory Cost of computer system in inventory Normalselling priceofcomputer system by Clarkson Inventorysystemused by Clarkson 12,000 15,200 Perpetual 4. Truck #4 $ 14,000 List price Acquired in exchangefor common stock in Clarkson Corporation 4 1,000 shares Parvalueof common stock per share Market value ofcommonstock per share 10.00 13.00

E10-3 (LO1) Acquisition Costs of Trucks KellyClarkson Corporation operates aretail computer store. To improvedelivery servicesto customers, the company purchases four new trucksonApril 1, 2020. The termsofacquisition for each truck are described below. Instructions: Prepare the appropriate journal entries for the above transactions for Clarkson Corporation. Debit Credit 1. Truck #1 List price $ 15,000 Cash acquisition cost 13,900 2. Truck #2 List price $ 16,000 Hint: Use the Excel Present Value formula. 2 Acquisition cost Cash downpayment 2,000 14,000 Face amount of zero-interest bearing note assumed Note duedate Normalinterest ratefor this borrowing April 1, 2021 10% Incremental borrowingrate 8% 3. Truck #3 List price $ 16,000 3. Acquired in exchangefor a computer system that Clarkson carries in inventory Cost of computer system in inventory Normalselling priceofcomputer system by Clarkson Inventorysystemused by Clarkson 12,000 15,200 Perpetual 4. Truck #4 $ 14,000 List price Acquired in exchangefor common stock in Clarkson Corporation 4 1,000 shares Parvalueof common stock per share Market value ofcommonstock per share 10.00 13.00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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E10-3 (LO1) Acquisition Costs of Trucks KellyClarkson Corporation operates aretail computer store. To improvedelivery servicesto customers, the company purchases four new trucksonApril 1, 2020. The termsofacquisition for each truck are described below. Instructions: Prepare the appropriate journal entries for the above transactions for Clarkson Corporation. Debit Credit 1. Truck #1 List price $ 15,000 Cash acquisition cost 13,900 2. Truck #2 List price $ 16,000 Hint: Use the Excel Present Value formula. 2 Acquisition cost Cash downpayment 2,000 14,000 Face amount of zero-interest bearing note assumed Note duedate Normalinterest ratefor this borrowing April 1, 2021 10% Incremental borrowingrate 8% 3. Truck #3 List price $ 16,000 3. Acquired in exchangefor a computer system that Clarkson carries in inventory Cost of computer system in inventory Normalselling priceofcomputer system by Clarkson Inventorysystemused by Clarkson 12,000 15,200 Perpetual 4. Truck #4 $ 14,000 List price Acquired in exchangefor common stock in Clarkson Corporation 4 1,000 shares Parvalueof common stock per share Market value ofcommonstock per share 10.00 13.00
Transcribed Image Text:E10-3 (LO1) Acquisition Costs of Trucks KellyClarkson Corporation operates aretail computer store. To improvedelivery servicesto customers, the company purchases four new trucksonApril 1, 2020. The termsofacquisition for each truck are described below. Instructions: Prepare the appropriate journal entries for the above transactions for Clarkson Corporation. Debit Credit 1. Truck #1 List price $ 15,000 Cash acquisition cost 13,900 2. Truck #2 List price $ 16,000 Hint: Use the Excel Present Value formula. 2 Acquisition cost Cash downpayment 2,000 14,000 Face amount of zero-interest bearing note assumed Note duedate Normalinterest ratefor this borrowing April 1, 2021 10% Incremental borrowingrate 8% 3. Truck #3 List price $ 16,000 3. Acquired in exchangefor a computer system that Clarkson carries in inventory Cost of computer system in inventory Normalselling priceofcomputer system by Clarkson Inventorysystemused by Clarkson 12,000 15,200 Perpetual 4. Truck #4 $ 14,000 List price Acquired in exchangefor common stock in Clarkson Corporation 4 1,000 shares Parvalueof common stock per share Market value ofcommonstock per share 10.00 13.00
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