Question

Cool Phone Accessory Company is offering a 10% discount for cracked screen repair. You walk into the store and they fix your phone right then. The sales price before the discount is $75.00 What would be the journal entry to record the sale with a 10% discount, assuming you paid cash and the service is not taxable?

Select one

a. DR Cash $67.50 CR Repair Revenue $67.50
b. OR Cash $75.00 CR Repair Revenue $75.00 Dit Cash $75.00
c. CR Sales discount $7.50 CR Repair Revenue $67.50 X
d. DR Cash $67.50 DR Sales discount $7.50 CR Repair Revenue $75.00

Answer 1

The correct journal entry for a $75.00 sale with a 10% discount paid in cash for repair services, when the service is not taxable, is to debit Cash for $67.50, debit Sales Discount for $7.50, and credit Repair Revenue for $75.00.

Step-by-step explanation:

The proper journal entry to record a sale with a 10% discount for cash payment when the service is not taxable and the original sales price is $75.00 would be as follows:

Journal Entry:

• DR Cash $67.50
• DR Sales discount $7.50
• CR Repair Revenue $75.00

This entry reflects that the customer has paid cash, which is debited to the Cash account. The sales discount is also debited to show that it is an expense or loss to the company. The full sales price, before the discount, is credited to Repair Revenue, indicating the total amount that would have been earned without the discount.