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28 February, 17:27

On December 21, 2016, Alpha Company accepted from Bravo a $10,000, 90-day, 8% note in lieu of an existing $10,000 account receivable. Alpha Company's fiscal year-end is December 31. Use this information to prepare for the Alpha Company the General Journal entries (without explanation) for December 21, 2016.

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  1. 28 February, 17:56
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    December 21, 2016, General Journal entries

    Account Debit Credit

    Notes Receivable $10,000

    Account Receivable $10,000

    Explanation:

    December 21, 2016, General Journal entries

    Account Debit Credit

    Notes Receivable $10,000

    Account Receivable $10,000

    The accounts receivable of Alpha company were debited for $10,000 from Bravo company, When bravo company issued the note, Alpha company accepted it. Due to this acceptance, Accounts receivable were replaced by notes payable. So accounts receivable in debit were reduced to zero and were credited. Now notes receivable were debited as new asset.
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