Question

On March 12, Medical Waste Services provides services on account to Grace Hospital for $11,000, 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 transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Answer and Step-by-step explanation:

The journal entries are shown below:

On March 12

Account receivable A/c Dr $11,000

         To Sales $11,000

(Being the goods are sold on credit)

On March 11

Cash  $10,780

Sales discount  ($11,000 × 2%)          $220

       To Account receivable $11,000

(Being the cash received is recorded)

Only these two entries are recorded

Since the payment is made within 10 days so Grace hospital is eligible for the discount