6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise toReed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end,there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies willpay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31.Reed's adjusting journal entry will include:A) A debit to Sales Discounts for $225B) A credit to Allowance for Sales Discounts for $2,250C) A debit to Sales Discounts for $2,050D) A credit to Sales Discounts for $225E) No adjusting journal entry is required. Discount will be recognized when payment is received.

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Asked Oct 3, 2019
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6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise to
Reed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end,
there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies will
pay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31.
Reed's adjusting journal entry will include:
A) A debit to Sales Discounts for $225
B) A credit to Allowance for Sales Discounts for $2,250
C) A debit to Sales Discounts for $2,050
D) A credit to Sales Discounts for $225
E) No adjusting journal entry is required. Discount will be recognized when payment is received.
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6. During 2019, Reed Corporation sold merchandise for a total of $900,000. The cost of merchandise to Reed was $675,000. Reed offers credit terms of 1/10, n/30 to encourage early payment. At year-end, there are $22,500 of sales still eligible for the 1% discount. Reed believes that all of the companies will pay within the discount period to receive the 1% discount. Assume Reed's fiscal year is December 31. Reed's adjusting journal entry will include: A) A debit to Sales Discounts for $225 B) A credit to Allowance for Sales Discounts for $2,250 C) A debit to Sales Discounts for $2,050 D) A credit to Sales Discounts for $225 E) No adjusting journal entry is required. Discount will be recognized when payment is received.

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A sales discount represents a reduction, not in the selling price of the product or service, but in the amount to be paid by a credi...

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