Question

On January 6, Brumbaugh Co. sells merchandise on account to Pryor Inc. for $7,000, terms 2/10, n/30. On January 16, Pryor Inc. pays the amount due. Prepare the entries on Brumbaugh’s books to record the sale and related collection. (Omit cost of goods sold entries.) (b) On January 10, Andrew Farley uses his Paltrow Co. credit card to purchase merchandise from Paltrow Co. for $9,000. On February 10, Farley is billed for the amount due of $9,000. On February 12, Farley pays $5,000 on the balance due. On March 10, Farley is billed for the amount due, including interest at 1% per month on the unpaid balance as of February 12. Prepare the entries on Paltrow Co.’s books related to the transactions that occurred on January 10, February 12, and March 10. (Omit cost of goods sold entries.)

Answer 1

Answer:

No.      Date       Accounts titles and explanation   Debit    Credit

(a)       Jan. 6      Accounts receivable               $7,600  

                                           Sales                                             $7,600

              Jan. 16              Cash                                 $7,296  

                                   Sales discounts($7,600 * 4%) $304  

                                     Accounts receivable                              $7,600

(b)        Jan. 10        Accounts receivable                 $13,300  

                                                       Sales                             $13,300

                Feb. 12                        Cash                   $6,650  

                                     Accounts receivable                             $6,650                              

               Mar. 10             Accounts receivable          $133  

                                           Interest revenue(6,650 * 2%)     $133

Answer 2

Answer:

Explanation:

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