Answer:
See the explanation below.
Explanation:
1. For Juanita Construction, record the service on account on May 7 and the collection of cash on May 13.
<u>Date Details Dr ($) Cr ($)</u>
May 7 Account receivable 4,000
Sales revenue 4,000
<u><em> To record service provided to Michael Wolfe on account</em></u>
May 13 Cash 4,000
Account receivable 4,000
<u> To record cash collected form Michael Wolfe </u>
2. Record cash sales with a trade discount (LO5–2)
If we assume a trade discount of 2% is given by Juanita Construction to Michael Wolfe, we will have:
Trade discount = 2% * $4,000 = $80
The accounting entries will be as follows:
<u>Date Details Dr ($) Cr ($)</u>
May 7 Account receivable 3,920
Trade discount 80
Sales revenue 4,000
<u><em> To record service provided to Michael Wolfe on account</em></u>
May 13 Cash 3,920
Account receivable 3,920
<u> To record cash collected form Michael Wolfe </u>