Question

Presented below are selected transactions of Molina Company. Molina sells in large quantities to other companies and also sells its product in a small retail outlet.

March 1 Sold merchandise on account to Dodson Company for $5,000, terms 2/10, n/30.

March 3 Dodson Company returned merchandise worth $500 to Molina.

March 9 Molina collected the amount due from Dodson Company from the March 1 sale.

March 15 Molina sold merchandise for $400 in its retail outlet. The customer used his Molina credit card.

March 31 Molina added 1.5% monthly interest to the customer

Prepare journal for the transactions above

Answer 1

Solution:

Journal Entries - Molina Company
Date	Particulars	Debit	Credit
1-Mar	Accounts receivables Dr	$5,000.00
	To Sales revenue		$5,000.00
	(To record sales revneue)
3-Mar	Sales return and allowances Dr	$500.00
	To Accounts receivables		$500.00
	(To record sales returns)
9-Mar	Cash Dr	$4,410.00
	Sales discount Dr	$90.00
	To Accounts receivables		$4,500.00
	(To record collection from customer)
15-Mar	Accounts receivables Dr	$400.00
	To Sales revenue		$400.00
	(To record sales revneue)
31-Mar	Accounts receivables Dr ($400*1.5%*1/2)	$3.00
	To Interest revenue		$3.00
	(To record interest added to customer account for half month)