Brief Exercise 18-9 On January 2, 2017, Metlock Inc. sells goods to Geo Company

Question

Brief Exercise 18-9 On January 2, 2017, Metlock Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $9,200, with payment due in 12 months. The fair value of the goods at the date of sale is $8,100 (cost $4,860).

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 0 for the amounts.)

Date Account Titles and Explanation Debit Credit Jan. 2, 2017 (To record sales) (To record cost of goods sold) How much total revenue should be recognized in 2017? Total revenue

Explanation / Answer

Total Revenue = Amount of Notes Receivable

= $ 9,200

Date Account Titles and Explanation Debit Credit Jan 2 2017 Notes Receivable $ 9,200 Discount on Notes Receivable ($ 9,200 -$ 8,100) $ 1,100 Sales $ 8,100 Cost of Goods Sold $ 4,860 Inventory $ 4,860

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