Question

A credit sale is made on July 10 for $900, terms 2/10, n/30. On July 12, $100 of goods are returned for credit. Give the journal entry on July 19 to record the receipt of the balance due within the discount period.

Answer 1

July 19;

Dr: Cash -----------------$784

Dr: Sales Discount----$16

Cr: Accounts Receivable--------$800

Step-by-step explanation:

On July 19, the business must have factored in the $100 goods that was returned on July 12, so this will automatically reduce the accounts receivable to $800($900 - $100).

The discount does not reflect if paid on the last day of the month, so the discount of 2percent is still on as at July 19. The discount will be $16(2% of $800) and the amount of cash to be expected will be $784($800-16).

Therefore, the adjusting entry will be:

July 19;

Dr: Cash -----------------$784

Dr: Sales Discount----$16

Cr: Accounts Receivable--------$800