Final answer:
The correct journal entry for April 13 when payment was received includes a discount and full settlement of accounts receivable. It should debit Cash for $4,850, debit Sales Discounts for $150, and credit Accounts Receivable for $5,000 to reflect the discount for early payment.
Step-by-step explanation:
A sale on credit was made for $5,000 with terms of 3/10, n/30, and payment was received within the discount period. The correct journal entry for the payment date should include a discount. However, the accounts receivable debit has an error. The direct answer is that the corrected entry should debit cash for $4,850, debit sales discounts for $150, and credit accounts receivable for $5,000. The journal entry worksheet provided is for a seller who uses a perpetual inventory system. On April 4, the seller sold $5,000 worth of merchandise to a customer on credit terms of 3/10, n/30. This means that the customer can take a 3% discount if the payment is made within 10 days, otherwise, the full payment is due within 30 days.
The calculation for the discount is 3% of $5,000, which equals $150. This means the customer only pays $4,850 (which is $5,000 - $150). The sales discounts account is debited to reflect the reduced payment received as per the credit terms. The accounts receivable is credited to close out the full amount that was initially recognized when the sale was made on credit. This reflects using a perpetual inventory system where transactions are recorded at the time they occur. Therefore, the proper journal entry for the receipt of payment on the discount date will reflect a sales discount and full settlement of the receivable for the correct amounts.