Final answer:
Skysong Co. recorded the sale of $51,000 at the discounted price of $49,470 using the net method. When payment was received on June 12, it recorded the cash receipt and closed the accounts receivable for the same net amount as the customer took advantage of the 3% discount.
Step-by-step explanation:
Journal Entries for Skysong Co.
When Skysong Co. makes a sale on June 1, 2025, with terms 3/15, n/45, it means that the customer can take a 3% discount if payment is made within 15 days; otherwise, the net amount is due in 45 days. Given that Skysong Co. uses the net method to account for cash discounts, the initial entry on June 1 would be to record the net amount of sale, which is the amount less the potential discount.
Dr. Accounts Receivable $49,470 ($51,000 - 3% of $51,000)
Cr. Sales Revenue $49,470
On June 12, 2025, when Skysong Co. received the full payment, they would record the receipt of cash and elimination of accounts receivable:
Dr. Cash $49,470
Cr. Accounts Receivable $49,470
In this case, as the payment is made within the discount period, the customer has taken advantage of the 3% discount, and the transaction is settled at the discounted price. If the payment had been made after the discount period, the full amount of $51,000 would be recognized as both Accounts Receivable and Cash.