Prepare the appropriate journal entries for Wu Inc

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Reference no: EM132841072

Wu 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 $27,000 and was acquired for a cash payment of $23,900.

2. Truck #2 had a list price of $28,000 and was acquired for a down payment of $2,000 cash and a non-interest-bearing note with a face amount of $26,000. The note is due April 1, 2021. Wu would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.

3. Truck #3 had a list price of $25,000. It was acquired in exchange for a computer system that Wu carries in inventory. The computer system cost $16,500 and is normally sold by Wu for $21,000. Wu uses a perpetual inventory system.

4. Truck #4 had a list price of $26,000. It was acquired in exchange for 1,000 common shares of Wu Inc. The common shares trade in an active market valued at $23 per share in the most recent trade.

Problem 1: Prepare the appropriate journal entries for Wu Inc. for the above transactions, assuming that Wu prepares financial statements in accordance with IFRS.

Reference no: EM132841072

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