Question

#1 On June 3, Bridgeport Company sold to Chester Company merchandise having a sale price of $5,600 with terms of 2/10, n/60, f.o.b. shipping point. An invoice totaling $92, 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 Bridgeport Company books to record all the events noted above under each of the following bases.

(A)		Sales and receivables are entered at gross selling price.
(B)		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.)

No.	Date	Account Titles and Explanation	Debit	Credit
(1)	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
	June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(2)	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
	choose a transaction date                                                                      June 3June 12	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

  

  

Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29. (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.)

Date	Account Titles and Explanation	Debit	Credit
July 29	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount

Answer 1

(A)	1	Jun-03	Accounts Receivable—Chester Company	5,600
			Sales		5,600
			To record sales
		Jun-12	Cash (5,600*98%)	5,488
			Sales Discounts	112		=4600*2%
			Accounts Receivable—Chester Company		5,600
			To record payment received
	2	Jun-03	Accounts Receivable—Chester Company	5,488		=4600*0.98
			Sales		5,488
			To record sales
		Jun-12	Cash	5,488
			Accounts Receivable—Chester Company		5,488
			To record payment received
(B)	Jul-29		Cash	5,600
			Accounts Receivable—Chester Company		5,488
			Sales Discounts Forfeited		112
			To record payment received

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