Reference no: EM133053845
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 $27,700 and was acquired for a cash payment of $23,300.
2. Truck #2 had a list price of $30,200 and was acquired for a down payment of $1,900 cash and a non-interest-bearing note with a face amount of $28,300. The note is due April 1, 2021. Ivanhoe would normally have to pay interest at a rate of 11% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.
3. Truck #3 had a list price of $24,600. It was acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $15,000 and is normally sold by Ivanhoe for $20,700. Ivanhoe uses a perpetual inventory system.
4. Truck #4 had a list price of $25,700. It was acquired in exchange for 1,000 common shares of Ivanhoe Inc. The common shares trade in an active market valued at $23 per share in the most recent trade.
Required - 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).
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