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29 July, 18:49

On January 2, 2017, Vaughn Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $10,100, with payment due in 12 months. The fair value of the goods at the date of sale is $9,100 (cost $5,460). Prepare the journal entry to record this transaction on January 2, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts)

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  1. 29 July, 20:47
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    Dr Notes Receivable $10,100

    Cr Discount on Notes Receivable$1,000

    Cr Sales Revenue $9,100

    Dr Cost of Goods Sold $5,460

    Cr Inventory $5,460

    Explanation

    :

    Vaughn Inc

    Journal entry

    January 2, 2017

    Dr Notes Receivable $10,100

    Cr Discount on Notes Receivable

    $10,100-$9,100) $1,000

    Cr Sales Revenue $9,100

    Dr Cost of Goods Sold $5,460

    Cr Inventory $5,460

    Total Revenue:

    sales revenue + interest revenue $9,100+$1,000 = 10,100

    Total revenue = $10,100
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