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9 January, 21:04

On April 1, Moloney Meat Distributors sold merchandise on account to Fronke's Franks for $2,300 on Invoice 1001, terms 2/10, n/30. Payment was received in full from Fronke's Franks, less discount, on April 10. Required: Record the transactions on April 1 and April 10.

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  1. 9 January, 21:25
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    In Moloney Meat Distributors:

    On April 1, entry records the sales:

    Debit Accounts Receivable $2,300

    Credit Revenue $2,300

    On April 10, the entry:

    Debit Cash $2,254

    Debit Sales Discount $46

    Credit Accounts Receivable $2,300

    In Fronke's Franks:

    On April 1, the entry was made:

    Debit Merchandise $2,300

    Credit Accounts Payable $2,300

    On April 10:

    Debit Accounts Payable $2,300

    Credit Cash $2,254

    Credit Purchases Discount $46

    Explanation:

    The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

    In Moloney Meat Distributors:

    On April 1, the company sold merchandise on account, entry records the sales:

    Debit Accounts Receivable $2,300

    Credit Revenue $2,300

    On April 10, when received the payment from customer, Moloney Meat Distributors records 2% discount by the entry:

    Debit Cash $2,254

    Debit Sales Discount $46

    Credit Accounts Receivable $2,300

    In Fronke's Franks:

    On April 1, the entry was made:

    Debit Merchandise $2,300

    Credit Accounts Payable $2,300

    On April 10:

    Debit Accounts Payable $2,300

    Credit Cash $2,254

    Credit Purchases Discount $46
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