Answer:
Santa Fe Retailing ( Buyer )
<u>(a) the purchase,</u>
Merchandise $24,900 (debit)
Account Payable - Mesa Wholesalers $24,900 (credit)
<em>Being Recognition of Merchandise Purchased</em>
<u>(b) cash payment within the discount period,</u>
Account Payable - Mesa Wholesalers $24,153 (debit)
Cash $24,153 (credit)
<em>Being Recognition of Payment Made</em>
<u>(c) cash payment after the discount period</u>
Account Payable - Mesa Wholesalers $24,900 (debit)
Cash $24,900 (credit)
<em>Being Recognition of Payment Made</em>
Mesa Wholesalers ( Seller)
<u>(a) the purchase, </u>
Trade Receivable - Santa Fe Retailing $ 24,900 (debit)
Revenue $ 24,900 (credit)
<em>Being recognition of Revenue on Sale</em>
Cost of Sales $16,982 (debit)
Merchandise $16,982 (credit)
<em>Being recognition of Cost of Sale</em>
<u>(b) cash payment within the discount period</u>,
Cash $24,153 (debit)
Trade Receivable - Santa Fe Retailing $24,153 (credit)
<em>Being Recognition of Payment Received</em>
Discount Allowed $747 (debit)
Trade Receivable - Santa Fe Retailing $747 (credit)
<em>Being Recognition of Discount Granted to Customer</em>
<u>(c) cash payment after the discount period</u>
Cash $24,900 (debit)
Trade Receivable - Santa Fe Retailing $24,900 (credit)
<em>Being Recognition of Payment Received</em>
Explanation:
Santa Fe Retailing ( Buyer )
Buyer Recognizes Assets of Merchandise purchased and de-recognise cash when payment is made
Mesa Wholesalers ( Seller)
Seller Recognises revenue and Cost of Sale on the date of Sale
Seller also recognise Cash Receipts and Discount Allowed Expense (whenever payment is made within 10 days as in our case)
