Question

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. Eric pays on June 15, 2020, and Mount delivers the product on September 30, 2020. Prepare the journal entries required for Mount in 2020

Answer 1

Answer:

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Explanation:

Answer 2

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