Question

Ivanhoe 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 $27,200 and was acquired for a cash payment of $25,500.
2.		Truck #2 had a list price of $28,800 and was acquired for a down payment of $2,100 cash and a non–interest-bearing note with a face amount of $26,700. The note is due April 1, 2021. Ivanhoe 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 $22,900. It was acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $17,000 and is normally sold by Ivanhoe for $19,100. Ivanhoe uses a perpetual inventory system.
4.		Truck #4 had a list price of $23,400. It was acquired in exchange for 1,000 common shares of Ivanhoe Inc. The common shares trade in an active market valued at $22 per share in the most recent trade.

Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

(a)

Prepare the appropriate journal entries for Ivanhoe Inc. for the above transactions, assuming that Ivanhoe prepares financial statements in accordance with IFRS. For Truck #2, calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). (Credit account titles are automatically indented when the 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. Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title to record purchase of Truck #1	enter a debit amount	enter a credit amount
	enter an account title to record purchase of Truck #1	enter a debit amount	enter a credit amount
	(To record purchase of Truck #1.)
2.	enter an account title to record purchase of Truck #2	enter a debit amount	enter a credit amount
	enter an account title to record purchase of Truck #2	enter a debit amount	enter a credit amount
	enter an account title to record purchase of Truck #2	enter a debit amount	enter a credit amount
	(To record purchase of Truck #2.)
3.	enter an account title to record purchase of Truck #3	enter a debit amount	enter a credit amount
	enter an account title to record purchase of Truck #3	enter a debit amount	enter a credit amount
	(To record purchase of Truck #3.)
	enter an account title to record the cost of sold goods	enter a debit amount	enter a credit amount
	enter an account title to record the cost of sold goods	enter a debit amount	enter a credit amount
	(To record the cost of sold goods.)
4.	enter an account title to record purchase of Truck #4	enter a debit amount	enter a credit amount
	enter an account title to record purchase of Truck #4	enter a debit amount	enter a credit amount
	(To record purchase of Truck #4.)

Answer 1

	Ivanhoe Inc.
	General,Journal	Debit	Credit
Truck #1	Truck	$       25,500.00
	Cash		$     25,500.00
	(Amount of Truck #1 purchased ,list price $27200 )
Truck #2	Trucks	$       26,372.70
	Discount on Notes Payable($26700-$24272.70)	$         2,427.30
	Cash		$       2,100.00
	Notes Payable		$     26,700.00
	(Amount of Truck #2 purchased)
Truck #3	Trucks	$       19,100.00
	Cost of goods sold	$       17,000.00
	Inventory		$     17,000.00
	Sales Revenue		$     19,100.00
	(Amount of Truck #3 purchased)
Truck #4	Truck(1000*$22)	$       22,000.00
	Common Stock		$     10,000.00
	Paid in Capital excess of par		$     12,000.00
	(Amount of Truck#4 purchased)
	Truck#2
	P.V of $26700 @10% for 1 year	$       24,272.70
	P.V Factor @10% for 1 year	0.90909
	Cost of Truck=($24272.70+$2100)	$       26,372.70