Question

Stu Company sold Behn Company merchandise on account FOB shipping point, 3/10, net 30, for $8592. Stu prepaid the $287 shipping charge. Payment will be made within the discount period. What is the journal entry necessary for Stu Company to record this sale?

(select all lines of the entry)

Select one or more:

credit Sales 8592

credit Sales 8334

credit Accounts Receivable 8879

debit Freight 287

debit Cash 287

debit Accounts Receivable 8879

debit Sales 8334

debit Sales 8592

debit Accounts Receivable 8592

credit Accounts Receivable 8334

debit Accounts Receivable 8334

credit Freight 287

credit Cash 287

Answer 1

Particulars	Debit	Credit
Accounts Receivable	$        8,879
Freight		$           287
Sales		$        8,592

Freight needs to be paid by the buyer - Buyers must record shipping charges as transportation in (or Freight In) when the goods were shipped FOB shipping point and they have received title to the merchandise.

Hence needs to be recovered from the buyer.

Discount needs to be accounted for on the basis of payment. Means the discount will be accounted for when buyer makes the payment.