Question

On March 12, Medical Waste Services provides services on account to Grace Hospital for $11,000, terms 2/10, n/30. Grace does not pay for services until March 31, missing the 2% sales discount.

Required:
For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 31. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Dr accounts receivable $11,000

Cr service revenue $11,000

Dr cash $11,000

Cr accounts receivable $11,000

Step-by-step explanation:

Since the discount of 2% was missed, this means the account would be settled in full.

The appropriate entries for the service on account on March 12 is to credit service revenue with $11,000 while accounts receivable is debited with the same amount.

Upon receipt of cash on March 31, the accounts receivable would be credited with $11,000 while cash account is debited accordingly