Question

A company offers a 25% trade discount when providing services of $5,000 or more to its customers. Record the transaction when the company provides services of $5,400 (not including the trade discount) on account. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

The value of the services in this case exceeds the stated $5,000 cap. The client is therefore entitled to a 25% discount on the amount of the services offered. The journal entry would include a $4050 loss on the receivable report and a $4050 business benefit bonus. The table is attached below