Final answer:
Jo's Market will record the customer's payment on June 8 by debiting Cash for $980 and Sales Discounts for $20, and crediting Accounts Receivable for $1,000 to reflect a 2% discount for early payment.
Step-by-step explanation:
On June 5, Jo's Market sold $1,000 of goods on credit with terms of 2/10, n/30. This means the customer can take a 2% discount if they pay within 10 days; otherwise, the net amount is due in 30 days. Since the customer is paying on June 8, which is within the 10-day discount period, the payment is recorded as $980, reflecting the 2% discount ($20) off the $1,000 invoice. Here's how Jo's Market will journalize the payment on June 8:
- Cash Dr. $980
- Sales Discounts Dr. $20
- Accounts Receivable Cr. $1,000
The Sales Discounts account reflects the discount given to the customer and reduces the revenue from the sale, while the Accounts Receivable shows that the debt owed by the customer has been settled.