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10 March, 08:59

The Giles Agency offers a 12% trade discount when providing advertising services of $1,000 or more to its customers. Audrey's Antiques decides to purchase advertising services of $3,500 (not including the trade discount), while Michael's Motors purchases only $700 of advertising. Both services are provided on account. Record both transactions for Giles agency

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  1. 10 March, 09:16
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    The journal entries are as follows

    In the books of Giles Agency

    1. Account receivable Dr $3,080

    To Service revenue $3,080

    (Being the service is provided in account)

    The computation is shown below:

    = $3,500 - $3,500 * 12%

    = $3,500 - $420

    = $3,080

    2. Account receivable Dr $700

    To Service revenue $700

    (Being the service is provided in account)
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