Answer:
See explanation section
Explanation:
Medical Waste Services
Journal entries
March 12 Accounts receivable - Grace Hospital Debit $10,200
Service revenue Credit $10,200
Note: Assuming the company used periodic inventory system. Therefore, it does not need to show the journal entry for cost of goods sold. Also the journal entry is recorded as gross method.
March 20 Cash Debit $9,792
Sales discount Debit $408 (Note - 1)
Accounts receivable - Grace Hospital Credit $10,200
As Grace Hospital paid within discount period, i.e., within 10 days, Medical Waste Services provided 4% discount.
Note - 1: Calculation of discount = $10,200 × 4% = $408.
Cash = $10,200 - $408 = $9,792
