Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,900 tires to the Nixon Car Company for $45 each. The terms of the sale were 3/10, n/30. Harwell uses the gross method of accounting for cash discounts. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021.

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Business

Brayan Frank

27 October, 15:54

Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,900 tires to the Nixon Car Company for $45 each. The terms of the sale were 3/10, n/30. Harwell uses the gross method of accounting for cash discounts. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021.

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Reese Mitchell · Answer 1

Solution:

The journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021:

Date General Journal Debit Credit

July 15, 2021 Accounts receivable 50,000

Sales revenue 50,000

July 23, 2021 Cash 49,000

Sales discounts 1,900

Accounts receivable 47,100

Date General Journal Debit Credit

July 15, 2021 Accounts receivable 47,100

Sales revenue 47,100

Aug. 15, 2021 Cash 47,100

Accounts receivable 47,100