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Maru [420]
3 years ago
10

Giorgio Italian Market bought $4,000 worth of merchandise from Food Suppliers and signed a 90-day, 6% promissory note for the $4

,000. Food Supplier's journal entry to record the sales transaction is:A. Debit Accounts Receivable $4,000; credit Sales $4,000B. Debit Notes Receivable $4,000; credit Sales $4,000C. Debit Accounts Receivable $4,060; credit Sales $4,060D. Debit Notes Receivable $4,060; credit Sales $4,060E. Debit Notes Receivable $4,000; debit Interest Receivable $60; credit Sales $4
Business
1 answer:
Maurinko [17]3 years ago
4 0

Answer:

B. Debit Notes Receivable $4,000; credit Sales $4,000

Explanation:

Notice we are asked for hthe entry in the supplier's book:

The supplier will take the note thus, it will ahve a note receivable as in the future it expect to receive a cashflow.

The interest will be accrued over time, so are ignored for the moment

The supplier also has to recognize the amount of sales revenue earned with the sale.

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If the coupon is higher than the yield, investors should expect the bond's capital value to fall over the remaining term. Therefore, the price of the bond must be higher than its face value. If the bond's coupon rate is lower than its lifetime, the bond's price increases over its remaining lifetime.

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