Question

On June 3, Oriole Company sold to Chester Company merchandise having a sale price of $6,000 with terms of 4/10, n/60, f.o.b. shipping point. An invoice totaling $93, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Chester Company.

  
Prepare journal entries on the Oriole Company books to record all the events noted above under each of the following bases.

(1)       Sales and receivables are entered at gross selling price.
(2)       Sales and receivables are entered at net of cash discounts.

(If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Part - (1)	Date	Transaction	Debit ($)	Credit ($)
	June 3	Account receivable	6,000
		Sales		6,000
		(Merchandise sold)
	June 12	Cash	5,760
		Sales discount (6,000*4%)	240
		Account receivable		6,000
		(Check received)
Part - (2)	Date	Transaction	Debit ($)	Credit ($)
	June 3	Account receivable	5,760
		Sales		5,760
		(Merchandise sold)
	June 12	Cash	5,760
		Account receivable		5,760
		(Check received)