Question

Jax Recording Studio purchased $8,200 in electronic components from Music World. Jax signed a 90-day, 10% promissory note for $8,200. Music World's journal entry to record the sales transaction is:
A. Debit Notes Receivable $8,405; debit Interest Receivable $205; credit Sales $8,200
B. Debit Notes Receivable $8,405; credit Sales $8,405
C. Debit Accounts Receivable $8,405; credit Sales $8,405
D. Debit Accounts Receivable $8,200; credit Sales $8,200
E. Debit Notes Receivable $8,200; credit Sales $8,200

Answer 1

Answer:

E. Debit Notes Receivable $8,200; credit Sales $8,200

Explanation:

According to the problem, computation of the given data are as follows,

Sales on credit = $8,200

Notes receivable = $8,200

So, journal entries of the sales transaction are as follows,

Notes receivables A/c Dr.       $8,200

      To, Sales A/c.                   $ 8,200

(Being sales of equipment is recorded)