On july 1, cohen co. sold merchandise on account to tracy inc. for $23,000, terms 2/10, n/30. (b on july 8, tracy inc. returned merchandise worth $2,400 to cohen co. (c on july 11, tracy inc. paid for the merchandise.

Cost of goods sold entries will be omitted.

Debit Credit

July 1

Accounts Receivable 23,000

Sales 23,000

July 8

Sales Returns 2,400

Account Receivable 2,400

July 11 (within 10 days from date of purchase, so discount is availed)

23,000 - 2,400 = 20,600

20,600 x 2% = 412

20,600 - 412 = 20,188

Cash 20,188

Sales Discount 412

Accounts Receviable 20,600