Answer:
Dr. Accounts Receivable...........25,000
Cr. Sales................................................25,000
Narration. Being sale of inventory to Eric for $25,000
Dr Cash...............25,000
Cr. Accounts Receivable....25,000
Being receipt of Cash for Sales to Eric for $25000
Explanation:
On May 1, 2020, Mount Company enters into a contract to transfer a product to Eric Company on September 30, 2020.
It is agreed that Eric will pay the full price of $25,000 in advance on June 15, 2020.
Dr. Accounts Receivable...........25,000
Cr. Sales................................................25,000
Narration. Being sale of inventory to Eric for $25,000
When Eric pays on June 15, 2020, and Mount delivers the product on September 30, 2020.
Journal Entry
Dr Cash...............25,000
Cr. Accounts Receivable....25,000
Being receipt of Cash for Sales to Eric for $25000
