Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2019. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,000. Past history indicates that the cash discount will be taken. On January 28, 2019, Danone makes payment to Jupiter for the full sales price. Prepare the journal entry (ies) to record the sale and related cost of goods sold for Jupiter Company on January 2, 2019, and the payment on January 28, 2019. Assume that Jupiter Company records the January 2, 2019, transaction using the gross method

Question

Business

Kiera Cooley

14 November, 16:21

Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2019. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,000. Past history indicates that the cash discount will be taken. On January 28, 2019, Danone makes payment to Jupiter for the full sales price. Prepare the journal entry (ies) to record the sale and related cost of goods sold for Jupiter Company on January 2, 2019, and the payment on January 28, 2019. Assume that Jupiter Company records the January 2, 2019, transaction using the gross method

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Answers (1)

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Sarai Schneider · Answer 1

Journal Entry and their narrations is shown below:-

Explanation:

1. Notes receivable Dr, $610,000

To Sales revenue $610,000

(Being Sales revenue is recorded)

2. Cost of goods sold Dr, $500,000

To Inventory $500,000

(Being cost of goods sold is recorded)

3. Cash Dr, $610,000

To Notes receivable $610,000

(Being collections of notes receivable is recorded)