Question

On March 1, Lincoln sold merchandise on account to Windsor Company for $29,200, terms 1/10, net 45. On March 6, Windsor returns merchandise with a sales price of $2,700. On March 11, Lincoln receives payment from Windsor for the balance due. Prepare journal entries to record the March transactions on Lincoln’s books.

Answer 1

Journal entries

Date Account title and explanation Debit Credit

Mar 1 Account receivable $29,200

Sales revenue $29,200

Mar 6 Sales return and allowance $2,700

Account receivable $2,700

Mar 11 Cash $26,235

($26,500 * 99%)

Sales discount $265

Account receivable $26,500

($29,200 - $2,700)