On 6 April, the company received a 90-day, 10% acceptance covering the amount owing by F. French,...

Question:

On 6 April, the company received a 90-day, 10% acceptance covering the amount owing by F. French, the acceptor, for $5,500. What would go in the general journal to record receipt of bill?

Accounts Receivable:

A company's Accounts Receivable account is presented on the balance sheet as a current asset. The Accounts Receivable balance reflects the amount of money owed to the company by its customers for sales in the regular course of business.

Answer and Explanation:

In the general journal, we need to credit accounts receivable because it is being covered by the acceptance.

  • In addition, we need to debit Bills Receivable since the bill covers the amount of the receivable.

See below.

Account Dr Cr
Bills receivable 5,500
Accounts receivable 5,500

Learn more about this topic:

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Accounts Receivable Journal Entries

from Financial Accounting: Homework Help Resource

Chapter 3 / Lesson 20
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