Question

Myers and Company sold $1,800 of merchandise on account to Oscar, Inc. on March 1 with credit terms of 2/10, n/30. Oscar returned $500 of the merchandise due to poor quality on March 3. If Oscar pays for the purchase on March 11, what entry does Myers make to record receipt of the payment?

Answer 1

The answer is given below;

Step-by-step explanation:

March 1.

Account Receivable-Oscar Inc. Dr.$1,800

Sales Revenue Cr.$1,800

March 3.

Sales Revenue Dr.$500

Account Receivable Cr.$500

March 11.

Bank (1,800-500) Dr.$1,300

Account Receivable-Oscar Inc. Cr.$1,300

Please note that Oscar inc. has made payment after discount period of 10 days and 10th of march was the last date to avail discount on early payment.Therefore full payment,net of goods returned,will be recovered from Oscar inc.