bBramble Corporation builds in-home theater systems. Bramble’s business is growing quickly. Therefore, the CEO, Paul Bramble, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $16,380. Bramble exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $10,140. Bramble normally sells the equipment for $15,405. Bramble uses a perpetual inventory system. 2. The second truck has a list price of $17,160. Bramble makes a down payment of $3,900 cash on this truck and signs a zero-interest-bearing note with a face amount of $13,260. Payment of the note is due September 20, 2018. Bramble would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $14,976. This truck is acquired in exchange for 936 shares of common stock in Bramble Corporation. The stock has a par value per share of $10 and a market price of $15 per share. Prepare the appropriate journal entries for the above transactions for Bramble 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.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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bBramble Corporation builds in-home theater systems. Bramble’s business is growing quickly. Therefore, the CEO, Paul Bramble, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below.

1.		The first truck’s list price is $16,380. Bramble exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $10,140. Bramble normally sells the equipment for $15,405. Bramble uses a perpetual inventory system.
2.		The second truck has a list price of $17,160. Bramble makes a down payment of $3,900 cash on this truck and signs a zero-interest-bearing note with a face amount of $13,260. Payment of the note is due September 20, 2018. Bramble would normally have to pay interest at a rate of 8% for such a borrowing.
3.		The list price of the third truck is $14,976. This truck is acquired in exchange for 936 shares of common stock in Bramble Corporation. The stock has a par value per share of $10 and a market price of $15 per share.

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

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