Mr Han owes to Saigon Logistics of RM2,000. Upon early settlement of his debt to Saigon...

Mr Han owes to Saigon Logistics of RM2,000. Upon early settlement of his debt to Saigon Logistics, the company only demanded RM1,800 for payment. Hence, in the book of Saigon Logistics, the difference of RM200 shall be recognised as ______

Solutions

Expert Solution

Based on the information available in the question, we can understand that Mr.Han, who owes RM2,000 to Saigon Logistics made an early settlement of of his debt by paying only RM1,800. The difference RM200 (RM2,000 - RM1,800)

The journal entry to record the above transaction is :-

Particulars	Debit	Credit

Cash A/c	1,800
Discount Allowed A/c	200
To Accounts Receivable - Mr.Han		2,000
(To record the cash received on settlement of debt)

As per the observation of the entry above, the difference of RM200 is recognized as Discount Allowed.

Please let me know if you have any questions via comments and all the best :)

ekkarill92 answered 1 year ago

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