Jax Recording Studio purchased $7,800 in electronic components from Music World.Jax signed a 60-day,8% promissory note for $7,800.Music World's journal entry to record the sales transaction is:
A)Debit Accounts Receivable $7,800;credit Sales $7,800
B)Debit Accounts Receivable $7,904;credit Sales $7,904
C)Debit Notes Receivable $7,800;credit Sales $7,800
D)Debit Notes Receivable $7,904;credit Sales $7,904
E)Debit Notes Receivable $7,800;debit Interest Receivable $104;credit Sales $7,904

Question

Quizplus · Accepted Answer

The journal entry should reflect the sale of electronic components on a promissory note, which means the journal entry should debit Notes Receivable and credit Sales for the same amount of $7,800. Option A and B are incorrect because they suggest recording the sale on accounts receivable, which is not the case since Jax Recording Studio signed a promissory note. Option D is incorrect because it suggests recording the sale with an additional cost not mentioned in the question. Option E is incorrect because it suggests recording the sale with interest, which is not mentioned in the question.

Jax Recording Studio Purchased $7,800 in Electronic Components from Music