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( Appendix 5A) Sales Discounts
Harry Gardner provides tax services for small businesses. This year’s tax season has proved especially lucrative for Harry; he earned $45,000 for providing his services. Harry uses terms of 1/10, n/30 in billing his customers.
Required:
1. Prepare the necessary journal entries to record the sale, assuming Harry does not expect his customers to pay within the discount period.
2. Prepare the necessary journal entries to record collection of the receivable assuming the customer pays within 10 days.
3. Prepare the necessary journal entries to record collection of the receivable assuming the customer pays after 10 days.
(a)
Sales discounts:
The term
To calculate:
The journal entry for the recording of sale revenue.
The service contract has a price of
Journal entry for recording sales revenue:
| Date | Particulars | Debit | Credit |
(b)
Sales discounts:
The term
To calculate:
The journal entry for the receiving payment within
(c)
Sales discounts:
The term
To calculate:
The journal entry for receiving payment after
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