Answer:
To record the collected account receivable, we need to consider the transactions related to the purchase and return of merchandise by Wilson Purchasing from Happy Sales.
1. On May 11, Wilson Purchasing purchased $30,000 of merchandise from Happy Sales.
Debit: Inventory $30,000
Credit: Accounts Payable $30,000
2. On May 11, Wilson paid $2,000 to Express Shipping Service for the delivery charges.
Debit: Delivery Charges (an expense account) $2,000
Credit: Cash $2,000
3. On May 12, Wilson returned $5,000 of goods to Happy Sales.
Debit: Accounts Payable $5,000
Credit: Inventory $5,000
4. On May 12, Wilson Purchasing restored the returned goods to inventory, which had cost Happy $4,200.
Debit: Inventory $4,200
Credit: Cost of Goods Sold $4,200
Now, we need to calculate the net amount payable to Happy Sales after considering the terms and applicable discounts:
Total Purchase Cost (excluding delivery charges): $30,000 (original purchase)
Less: Returned Goods Cost: $4,200
Net Purchase Cost: $30,000 - $4,200 = $25,800
Less: Early Payment Discount (1% of $25,800): $25,800 * 0.01 = $258
Net Amount Payable: $25,800 - $258 = $25,542
5. On May 20, Wilson mailed a cheque to Happy for the amount owed on that date ($25,542).
Debit: Accounts Payable $25,542
Credit: Cash $25,542
Happy Sales received and recorded the cheque on May 21, so no further entries are needed for that transaction.
Now, the collected account receivable has been recorded in Wilson Purchasing's books through the Accounts Payable account, and the payment has been recorded in Happy Sales' books through the Cash account.