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On January 10, 2017, Perez Co. sold merchandise on account to Robertsen Co. for $24,600, n/30. On February 9, Robertsen Co. gave Perez Co. a 11% promissory note in settlement of this account.Prepare the journal entry to record the sale and the settlement of the account receivable.

Answer :

akiran007

Answer:

Two entries are made one for sale and the other for the promissory note.

Perez Co

Date                         Particulars                   Debit                        Credit

January 10, 2017        Accounts Receivable      $24,600, Dr

                                         Merchandise                        $24,600,Cr

Sale of merchandise on account to Robertsen Co. for $24,600, n/30.

February 9,      Notes Receivable            $ 24600 Dr

                                Accounts Receivable      $24,600 Cr  

Robertsen Co. gave Perez Co. a 11% promissory note in settlement of this account.

As this note is given within the 30 days no cash has been paid in settlement of the accounts receivable. If any cash had been paid the entry would have been different.

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