# Window World extended credit to customer Nile Jenkins in the amount of \$130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is \$56,200. On September 4, Window World determined that Nile Jenkins’s account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

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Section
FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 9, Problem 4EA
Textbook Problem
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## Window World extended credit to customer Nile Jenkins in the amount of \$130,900 for his purchase of window treatments on April 2. Terms of the sale are 2/60, n/150. The cost of the purchase to Window World is \$56,200. On September 4, Window World determined that Nile Jenkins’s account was uncollectible and wrote off the debt. On December 3, Mr. Jenkins unexpectedly paid in full on his account. Record each Window World transaction with Nile Jenkins. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Window World rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, however, that in most cases the direct write-off method is not allowed.

To determine

Concept introduction:

Journal Entry: In journal entry, a company records all the business transactions which are in monetary form. Company records the transaction on debit and credit side in a journal entry. The total of debit and credit side is always equal.

To prepare:

Journal Entry in the books of company.

### Explanation of Solution

 Date Particulars Debit (\$) Credit (\$) April 2 Accounts receivable A/c Sales A/c (Being goods sold on credit.) 130900 130900 April 2 Cost of goods sold A/c Inventory A/c (Being inventory is transferred to the cost of goods sold account...

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