Answer:
SHORE CO BOOKS:
accounts receivables 111,400 debit
sales revenues 111,400 credit
--to record the sale to Blue Star Co---
COGS 66,840 debit
inventory 66,840 credit
--to record cost of goods sold in previuos sale--
freight-out 1,800 debit
cash 1,800 credit
--to record payment of freight to transportist--
Cash 111,400 debit
Accounts Receivable 111,400 credit
--to record collectiong from Blue Star CO--
BLUE STAR CO BOOKS
Inventory 111,400 debit
Accounts Payable 111,400 credit
--to record the purchase of goods from SHORE CO--
Accounts Payable 111,400 debit
Cash 111,40 credit
--to record payment to SHORE CO--
Explanation:
Shore paid freight of $1,800 as the transfership of ownership occurs at destination point thus, the good belong to Shore and must carry the cost of transportation.
Blue start only does the purchase and payment entries.
We assume the payment is at nominal as we aren't given the information it was during discount date.
