Final answer:
The journal entry for the sale under basis 2 is as follows: Debit Accounts Receivable for the full amount of the sale, credit Sales Revenue for the same amount, debit Cash for the discounted amount received, debit Sales Discounts for the difference, and credit Accounts Receivable for the full amount of the sale.
Step-by-step explanation:
The journal entry would be as follows:
Date: July 29
Account title: Accounts Receivable
Debit:
3,100
Account title: Sales Revenue
Credit:
3,100
Date: July 29
Account title: Cash
Debit:
2,959
Account title: Sales Discounts
Debit:
141
Account title: Accounts Receivable
Credit:
3,100
Note that basis 2 assumes that the sales discount is taken before the payment is received. Therefore, the Accounts Receivable account is debited for the full amount of the sale, and then credited for the discounted amount when the payment is received. The difference between the original sale price and the discounted amount is recorded as Sales Discounts. The cash received is recorded as a debit to the Cash account.