Mullis Company sold merchandise on account to a customer for $705, terms n/30. The journal entry to record this sale transaction would be:

Multiple Choice

• Debit Cash of $705 and credit Sales $705.

• Debit Cash of $705 and credit Accounts Receivable $705.

• Debit Accounts Receivable $705 and credit Sales $705.

• Debit Accounts Receivable $705 and credit Cash $705.

• Debit Sales $705 and credit Accounts Receivable $705.

Winkler Company borrows $91,000 and pledges its receivables as security. The journal entry to record this transaction would be:

Multiple Choice

• Debit Cash of $91,000 and credit Accounts Receivable $91,000.

• Debit Cash of $91,000 and credit Accounts Payable $91,000.

• Debit Notes Receivable $91,000 and credit Accounts Receivable $91,000.

• Debit Cash $91,000 and credit Notes Payable $91,000.

• Debit Accounts Receivable $91,000 and credit Notes Payable $91,000.

An asset's book value is $19,800 on December 31, Year 5. Assuming the asset is sold on December 31, Year 5 for $13,200, the company should record:

Multiple Choice

• Neither a gain nor a loss is recognized on this transaction.

• A loss on sale of $12,600.

• A gain on sale of $6,600.

• A loss on sale of $6,600.

• A gain on sale of $12,600.