On January 2, 2017, Vaughn Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $10,100, with payment due in 12 months. The fair value of the goods at the date of sale is $9,100 (cost $5,460). Prepare the journal entry to record this transaction on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts)

Question

Kamren Watts

Business

25 January, 01:43

On January 2, 2017, Vaughn Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $10,100, with payment due in 12 months. The fair value of the goods at the date of sale is $9,100 (cost $5,460). Prepare the journal entry to record this transaction on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts)

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Victor · Answer 1

Dr Notes Receivable $10,100

Cr Discount on Notes Receivable$1,000

Cr Sales Revenue $9,100

Dr Cost of Goods Sold $5,460

Cr Inventory $5,460

Explanation

:

Vaughn Inc

Journal entry

January 2, 2017

Dr Notes Receivable $10,100

Cr Discount on Notes Receivable

$10,100-$9,100) $1,000

Cr Sales Revenue $9,100

Dr Cost of Goods Sold $5,460

Cr Inventory $5,460

Total Revenue:

sales revenue + interest revenue $9,100+$1,000 = 10,100

Total revenue = $10,100