Question

Oriole Company sold $122000 of goods and accepted the customer's $122000 8%, 1-year note receivable in exchange. Assuming 9% approximates the market rate of return, what would be the debit in this journal entry to record the sale

Answer 1

Answer:

Debit of this Journal Entry will be NOTE RECEIVABLE by $122,000.

Explanation:

As sales are made the sales account will be credited due to its credit nature. On the other hand there is a Note receivable in place of cash or account receivable which should be debited because of it nature of current Liability.

The Journal Entry to record this transaction will be as follow:  

                                              Dr.           Cr.

Note Receivable              $122,000

Sales                                                   $122,000