Novak Co. uses the net method to account for cash discounts. On June 1, 2020, it made sales of $52,500 with terms 3/15, n/45. On June 12, 2020, Novak received full payment for the June 1 sale. Prepare the required journal entries for Novak Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

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Business

Amirah

3 June, 22:50

Novak Co. uses the net method to account for cash discounts. On June 1, 2020, it made sales of $52,500 with terms 3/15, n/45. On June 12, 2020, Novak received full payment for the June 1 sale. Prepare the required journal entries for Novak Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

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Myles Jensen · Answer 1

The journal entries are shown below:

On 1 June 2020

Accounts receivable A/c Dr $50,925

To Sales revenue $50,925

(Being goods are sold on credit)

On July 12 2020

Cash A/c Dr $50,925

To Accounts receivable A/c $50,925

(Being cash received is recorded)

The computation is shown below:

= Sales amount - discount

= $52,500 - $1,575

= $50,925

And, The discount = Sales amount * discount rate

= $52,500 * 3%

= $1,575