Answer:
The journal entry that Courtland makes on October 8 is:
Debit Cash $5,684
Debit Sales Discount $116
Credit Receivable Accounts $5,800
Explanation:
On October 1, when Courtland Company sold merchandise, the following entries were made:
1. Debit Cost of goods sold $4,000
Credit Merchandise $4,000
2. Debit Receivable Accounts $5,800
Credit Sales $5,800
Credit terms of 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.
Carter pays and takes the appropriate discount:
2% x $5,800 = $116
Cash Courtland Company receives: $5,800-$116 = $5,684
The journal entry that Courtland makes on October 8 is:
Debit Cash $5,684
Debit Sales Discount $116
Credit Receivable Accounts $5,800
