Answer:
A. June 3
Dr Accounts Receivable—Chester $3,800
Cr Sales Revenue $3,800
June 12
Dr Cash $3,648
Dr Sales Discounts $152
Cr Accounts Receivable—Chester $3,800
B. June 3
Dr Accounts Receivable—Chester $3,648
Cr Sales Revenue $3,648
June 12
Dr Cash $3,648
Cr Accounts Receivable—Chester $3,648
Explanation:
A. Preparation of the journal entries on the Pronghorn Company books to record Sales and receivables are entered at gross selling price.
June 3
Dr Accounts Receivable—Chester $3,800
Cr Sales Revenue $3,800
June 12
Dr Cash $3,648
($3,800-$152)
Dr Sales Discounts ($3,800 X 4%) $152
Cr Accounts Receivable—Chester $3,800
B. Preparation of the journal entries on the Pronghorn Company books to record Sales and receivables are entered at gross selling price Sales and receivables are entered at net of cash discounts.
June 3
Dr Accounts Receivable—Chester $3,648
Cr Sales Revenue ($3,800 X 96%) $3,648
June 12
Dr Cash $3,648
Cr Accounts Receivable—Chester $3,648
