Answer:
Explanation:
The journal entries are shown below:
Using net method:
1. Notes receivable A/c Dr $650,000 ($659,900 - $9,900)
To Sales revenue A/c $650,000
(Being the sale is recorded)
2. Cost of goods sold A/c Dr $460,000
To Inventory A/c $460,000
(Being cost of goods sold is recorded)
3. Cash A/c Dr $659,900
To Notes receivable $650,000
To Discount forfeited $9,900
(Being received payment is recorded)
Using gross method:
1. Notes receivable A/c Dr $650,000 ($659,900 - $9,900)
To Sales revenue A/c $650,000
(Being the sale is recorded)
2. Cost of goods sold A/c Dr $460,000
To Inventory A/c $460,000
(Being cost of goods sold is recorded)
3. Cash A/c Dr $659,900
To Notes receivable $659,900
(Being received payment is recorded)
