Question
Ayayai Corporation builds in-home theater systems. Ayayais business is growing quickly. Therefore, the CEO, Paul Ayayai, decides to purchase three new trucks on September 20,
Ayayai Corporation builds in-home theater systems. Ayayais business is growing quickly. Therefore, the CEO, Paul Ayayai, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below.
1. | The first trucks list price is $25,200. Ayayai exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $15,600. Ayayai normally sells the equipment for $23,700. Ayayai uses a perpetual inventory system. | |
2. | The second truck has a list price of $26,400. Ayayai makes a down payment of $6,000 cash on this truck and signs a zero-interest-bearing note with a face amount of $20,400. Payment of the note is due September 20, 2018. Ayayai would normally have to pay interest at a rate of 8% for such a borrowing. | |
3. | The list price of the third truck is $23,040. This truck is acquired in exchange for 1,440 shares of common stock in Ayayai Corporation. The stock has a par value per share of $12 and a market price of $15 per share. |
Prepare the appropriate journal entries for the above transactions for Ayayai Corporation. (Round present value factors to 5 decimal places, e.g. 0.52587 and final answers to 2 decimal places, e.g. 5,275.50. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
1. | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
2. | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
3. | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started