Question

On January 6, Brumbaugh Co. sells merchandise on account to Pryor Inc. for $7,000, terms 2/10, n/30. On January 16, Pryor Inc. pays the amount due. Prepare the entries on Brumbaugh’s books to record the sale and related collection. (Omit cost of goods sold entries.) (b) On January 10, Andrew Farley uses his Paltrow Co. credit card to purchase merchandise from Paltrow Co. for $9,000. On February 10, Farley is billed for the amount due of $9,000. On February 12, Farley pays $5,000 on the balance due. On March 10, Farley is billed for the amount due, including interest at 1% per month on the unpaid balance as of February 12. Prepare the entries on Paltrow Co.’s books related to the transactions that occurred on January 10, February 12, and March 10. (Omit cost of goods sold entries.)

Answer 1

Step-by-step explanation:

check the picture attached for the solution and i hope it helps

Answer 2

No. Date Accounts titles and explanation Debit Credit

(a) Jan. 6 Accounts receivable $7,600

Sales $7,600

Jan. 16 Cash $7,296

Sales discounts($7,600 * 4%) $304

Accounts receivable $7,600

(b) Jan. 10 Accounts receivable $13,300

Sales $13,300

Feb. 12 Cash $6,650

Accounts receivable $6,650

Mar. 10 Accounts receivable $133

Interest revenue(6,650 * 2%) $133