On January 1, 2017, Cheyenne Co. sells property for which it had paid $674,800 t
ID: 342412 • Letter: O
Question
On January 1, 2017, Cheyenne Co. sells property for which it had paid $674,800 to Sargent Company, receiving in return Sargent’s zero-interest-bearing note for $1,000,000 payable in 5 years. What entry would Cheyenne make to record the sale, assuming that Cheyenne frequently sells similar items of property for a cash sales price of $628,000? (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan. 1
Explanation / Answer
Journal entry to record the sale of property will be:
Date Particulars L.F Amount ($) Amount ($) 2017 Jan-01 Note Receivable 1,000,000 Discount on notes receivable 372,000 Building 628,000 (For property sold against note receivable)