Question

On March 12, Medical Waste Services provides services on account to Grace Hospital for $9,100, terms 2/10, n/30. Grace pays for those services on March 20. Required: For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 20. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Answer and Explanation:

The journal entries are shown below:

On Mar 12

Account receivable Dr $9,100

To Service revenue $9,100

(Being the service provided on the account is recorded)

For recording this we debited the account receivable as it increased the assets and credited the service revenue as it also increased the revenue

On Mar 20

Cash $8,918

Sales discount ($9,100 × 2%) $182

To Accounts receivable $9,100

(Being cash received recorded)

For recording this we debited the sales discount and cash as it increased the discount and assets and credited the account receivable as it reduced the assets