The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed

The series of five transactions recorded in the following T accounts were related to a sale to a customer on account and the receipt of the amount owed. Briefly describe each transaction.

Cash Notes Receivable (e) 76,500(c) 75,000 (d) 75,000 Accounts Receivable Cost of Goods Sold (a) 75,000 (c) 75,000 (b) 45,000 (d) 75,400 (b) 75,400 InventoryInterest Revenue (b) 45,000(d) 400 (e) 1,100 Sales (a) 75,000

Answer:

a. Sale on account.

b. Cost of goods sold for the sale on account.

c. Note received from customer on account.

d. Note dishonored and charged face value of note plus interest to customer’s account receivable.

e. Payment received from customer for dishonored note plus interest earned after due date.