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

question 141

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 collection on the maturity date is:

• A)Debit Cash $7,800; credit Accounts Receivable $7,800
• B)Debit Accounts Receivable $7,904; credit Notes Receivable $7,800; credit Interest Receivable $104
• C)Debit Notes Receivable $8,008; credit Cash $7,904; credit Interest Revenue $104
• D)Debit Cash $7,904; credit Notes Receivable $7,800; credit Interest Revenue $104
• E)Debit Cash $7,904; credit Notes Receivable $7,904

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Definitions:

Plant Assets

Long-term tangible assets that are used in the production of goods and services and are not intended for resale.

Productive Capabilities

The capacity of a system, entity, or resource to produce goods or services of value, often influenced by technological, human, and physical resources.

Depreciation Rate

The percentage at which an asset's value decreases over time.

Straight-Line Rate

A fixed percentage used in the straight-line method of depreciation, representing how much of an asset's value is depreciated each year.