On May 1, 2020, People's Networks sold computer networking supplies to Florida Autos for $46,300. The cost of the supplies is $20,835. Instead of paying immediately, Florida Autos signed a note receivable with 10% annual interest, payable in eight months with the principle amount. People's Networks has a year end of October 31. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For transaction with two debits or credits, enter the debit accounts in alphabetical order followed by the credit accounts in alphabetical order. a) Record the journal entry when the sale is made; assume People's Networks uses the perpetual inventory system. Date Account Title and Explanation Debit Credit May 1 Notes Receivable 46300 Sales Revenue 46300 To record sales for notes receivable May 1 Cost of Goods Sold 20835 Merchandise Inventory + 20835 To record cost of goods sold b) Prepare journal entries for the year end adjustment on October 31, 2020. Date Account Title and Explanation Debit Credit Oct 31 Interest Receivable 2315 Interest Revenue 2315 To record accrued interest revenue c) Prepare journal entries for receipt of payment from Florida Autos on January 1, 2021. Date Account Title and Explanation Debit Credit Jan 1 Cash 771.66 Interest Receivable 771.66 Interest Revenue Notes Payable To record the receipt of payment for principle and interest
On May 1, 2020, People's Networks sold computer networking supplies to Florida Autos for $46,300. The cost of the supplies is $20,835. Instead of paying immediately, Florida Autos signed a note receivable with 10% annual interest, payable in eight months with the principle amount. People's Networks has a year end of October 31. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. For transaction with two debits or credits, enter the debit accounts in alphabetical order followed by the credit accounts in alphabetical order. a) Record the journal entry when the sale is made; assume People's Networks uses the perpetual inventory system. Date Account Title and Explanation Debit Credit May 1 Notes Receivable 46300 Sales Revenue 46300 To record sales for notes receivable May 1 Cost of Goods Sold 20835 Merchandise Inventory + 20835 To record cost of goods sold b) Prepare journal entries for the year end adjustment on October 31, 2020. Date Account Title and Explanation Debit Credit Oct 31 Interest Receivable 2315 Interest Revenue 2315 To record accrued interest revenue c) Prepare journal entries for receipt of payment from Florida Autos on January 1, 2021. Date Account Title and Explanation Debit Credit Jan 1 Cash 771.66 Interest Receivable 771.66 Interest Revenue Notes Payable To record the receipt of payment for principle and interest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On May 1, 2020, People's Networks sold computer networking supplies to
Florida Autos for $46,300. The cost of the supplies is $20,835. Instead of
paying immediately, Florida Autos signed a note receivable with 10% annual
interest, payable in eight months with the principle amount. People's
Networks has a year end of October 31.
Do not enter dollar signs or commas in the input boxes.
Round all answers to the nearest whole number.
For transaction with two debits or credits, enter the debit accounts in
alphabetical order followed by the credit accounts in alphabetical order.
a) Record the journal entry when the sale is made; assume People's
Networks uses the perpetual inventory system.
Date
Account Title and Explanation
Debit
Credit
May 1
Notes Receivable
46300
Sales Revenue
46300
To record sales for notes
receivable
May 1
Cost of Goods Sold
20835
Merchandise Inventory →
20835
To record cost of goods sold
b) Prepare journal entries for the year end adjustment on October 31, 2020.
Date
Account Title and Explanation
Debit
Credit
Oct 31
Interest Receivable
2315
Interest Revenue
2315
To record accrued interest
revenue
c) Prepare journal entries for receipt of payment from Florida Autos on
January 1, 2021.
Date
Account Title and Explanation
Debit
Credit
Jan 1
Cash
771.66
Interest Receivable
771.66
Interest Revenue
Notes Payable
To record the receipt of payment
for principle and interest
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