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19 January, 19:01

On July 2nd, Mills Wholesalers sells $3,150 of goods to Barnett Incorporated with terms 2/15, n/eom. On July 9th, Mills grants a sales allowance of $750 to Barnett. Journalize the cash entry for Mills if Barnett makes payment in full on July 9th.

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  1. 19 January, 19:30
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    The journal entry is as follows:

    Cash A/c Dr $2,352

    Sales Discount A/c Dr $48

    To Accounts receivable $2,400

    (Being cash received recorded)

    The computation of the account receivable

    = Credit sales - sales allowance

    = $3,150 - $750

    = $2,400

    And, the discount would be

    = Accounts receivable * percentage given

    = $2,400 * 2%

    = $48

    The remaining amount would be credited to the cash account.
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