Question

On February 3, Smart Company sold merchandise in the amount of $4,100 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $2,830. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:

Answer 1

Dr Cash $4,018

Dr Sales discounts $82

Cr Accounts receivable $4,100

Step-by-step explanation:

Based on the information given The Appropriate journal entry that Smart makes on February 8 is:

February 8

Dr Cash $4,018

Dr Sales discounts $82

Cr Accounts receivable $4,100

Workings:

Sales Discounts = $4,100 × .02

Sales Discounts= $82

Cash = $4,100 − $82

Cash = $4018