21. On January $10,000, X company sold merchandise on account to Y company for $12,000, n/30. On February 9, Y company gave X company a 10% promissory note in settlement of this account.
Prepare journal entry to record the sale and the settlement of the accounts receivable.
The journal entry to record the sale of merchandise on account on January 21, 20XX would be:
Accounts Receivable - Y Company 12,000
Sales 12,000
The journal entry to record the settlement of the accounts receivable on February 9, 20XX would be:
Notes Receivable - Y Company 10,800
Interest Income 200
Accounts Receivable - Y Company 12,000