Question

Concord Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales of $57,000 with terms 2/15, n/45. On June 12, 2020, Concord received full payment for the June 1 sale. Prepare the required journal entries for Concord Co. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

Answer 1

Answer:

See below.

Explanation:

We record the entries as follows,

First record the total gross sales,

Debit accounts receivables by $57,000

Credit Sales by $57,000

Payment terms provide us that 2% discount if paid within 15 days and no discount thereafter.

We record the payments as,

Cash debit by ($57,000 * 0.98) = $55,860

Discounts allowed debit by ($57,000*0.02) = $1,140

Credit Discount receivable by $57,000

Hope that helps.