Music World sold $7,800 in electronic components to Jax Recording Studio. Jax si

Question

Music World sold $7,800 in electronic components to Jax Recording Studio. Jax signed a 60-day, 8% promissory note for $7,800. Music World's journal entry to record the collection on the maturity date is:

Debit Cash $7,904; credit Notes Receivable $7,904

Debit Notes Receivable $7,800; credit Cash $7,904; credit Interest Revenue $104

Debit Cash $7,904; credit Notes Receivable $7,800; credit Interest Revenue $104

Debit Cash $7,800; credit Accounts Receivable $7,800

Debit Accounts Receivable $7,904; credit Notes Receivable $7,800; credit Interest Receivable $104

Explanation / Answer

Interest revenue = 7800*8%/360*60= 104 Debit Cash $7,904; credit Notes Receivable $7,800; credit Interest Revenue $104 Option 3 is correct

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