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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entries for notes receivable

The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction.

Cash Notes Receivable
(e) 76,500 (c) 75,000 (d) 75,000
Accounts Receivable Cost of Goods Sold
(a) 75,000 (c) 75,000 (b) 45,000
(d) 75,400 (b) 75,400
Inventory Interest Revenue
(b) 45,000 (d) 400
(e) 1,100
Sales
(a) 75,000

To determine

Journal:

Journal is the book of original entry. Journal consists of the day today financial transactions in a chronological order. The journal has two aspects; they are debit aspect and the credit aspect.

Rules of debit and credit:

“An increase in an asset account, an increase in an expense account, a decrease in liability account, and a decrease in a revenue account should be debited.

Similarly, an increase in liability account, an increase in a revenue account and a decrease in an asset account, a decrease in an expenses account should be credited”.

To describe: Each transaction related to sale to a customer on account and the receipt of the amount owed.

Explanation

Describe each transaction.

(a)

Sale on account

(b)

Cost of goods sold for the sale on account.

(c)

Note received from customer on account...

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