Practice Exercise 10-1

Flounder Corporation builds in-home theater systems. Flounders business is growing quickly. Therefore, the CEO, Paul Flounder, 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 $17,640. Flounder exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $10,920. Flounder normally sells the equipment for $16,590. Flounder uses a perpetual inventory system.
2.		The second truck has a list price of $18,480. Flounder makes a down payment of $4,200 cash on this truck and signs a zero-interest-bearing note with a face amount of $14,280. Payment of the note is due September 20, 2018. Flounder would normally have to pay interest at a rate of 8% for such a borrowing.
3.		The list price of the third truck is $16,128. This truck is acquired in exchange for 1,008 shares of common stock in Flounder Corporation. The stock has a par value per share of $10 and a market price of $14 per share.

Prepare the appropriate journal entries for the above transactions for Flounder 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.)