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2. Truck #2 has a list price of $41,120 and is acquired for a down payment of $5,140 cash and a zero-interest-bearing note with a
2. | Truck #2 has a list price of $41,120 and is acquired for a down payment of $5,140 cash and a zero-interest-bearing note with a face amount of $35,980. The note is due April 1, 2018. Buffalo 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%. |
No. | Account titles and Explanation | Debit | Credit |
2. | Trucks | ? | |
Discount on Notes Payable | ? | ||
Cash | 5140 | ||
Notes Payable | 35980 |
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