Jax Recording Studio Purchased $7,800 in Electronic Components from Music

question 124

Multiple Choice

Jax Recording Studio purchased $7,800 in electronic components from Music World. Jax signed a 60-day, 8% promissory note for $7,800.
-Music World's journal entry to record the sales transaction is:

• A) Debit Notes Receivable $7,800; debit Interest Receivable $104; credit Sales $7,904
• B) Debit Notes Receivable $7,904; credit Sales $7,904
• C) Debit Notes Receivable $7,800; credit Sales $7,800
• D) Debit Accounts Receivable $7,800; credit Sales $7,800
• E) Debit Accounts Receivable $7,904; credit Sales $7,904

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Definitions:

Depreciation Expense

Represents the systematic reduction in the recorded cost of a fixed asset over its useful life.

Functional Currency

The main form of money used in the chief economic setting where an organization functions, usually utilized in its financial statements.

Exchange Rates

The cost of converting one currency into another.