Question

Jax Recording Studio purchased $7,800 in electronic components from Music World. Jax signed a 60-day, 8% promissory note for $7,800. Music World's journal entry to record the sales transaction is: A. Debit Accounts Receivable $7,800; credit Sales $7,800 B. Debit Accounts Receivable $7,904; credit Sales $7,904 C. Debit Notes Receivable $7,800, credit Sales $7,800 0 D. Debit Notes Receivable $7,904; credit Sales $7,904 0 E. Debit Notes Receivable $7,800, debit Interest Receivable $104; credit Sales $7,904

Answer 1

Answer:

The correct journal entry for the sale of electronic component is option E

Explanation:

Notes Receivable A/c................Dr   $7,800

            Sales A/c..................................Cr   $7,800

On sale of the electronic component, the company received notes receivable so any increase in asset is debited. Therefore, notes receivable is debited with the sale value or amount. And made a sale account so the sale account is credited.