Prepare a Journal Entry for the Purchase of a Truck

question 182

Essay

Prepare a journal entry for the purchase of a truck on April 4 for $85,700, paying $15,000 cash and the remainder on account. Omit explanation.

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Definitions:

Note Receivable

A written promise that one party will pay another party a specified sum of money, either on demand or at a set future date.

Promissory Note

A financial instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not yet compensated for.

Maker

The entity that issues or creates a promissory note and agrees to pay the note's amount to a specified party.