Journalize the following sales transactions for King Company.

King Company sold merchandise inventory for $150. The cost of the inventory was $90. The customer paid cash.

King Company was running a promotion and the customer received a $ 20 award at the time of sale that can be used at a future date on any King Company merchandise.

Begin by preparing the entry to journalize the sale position at the transaction. Do not record the expense related to the sale.

Question

Jayvon Randall

Business

20 March, 11:06

Journalize the following sales transactions for King Company.

King Company sold merchandise inventory for $150. The cost of the inventory was $90. The customer paid cash.

King Company was running a promotion and the customer received a $ 20 award at the time of sale that can be used at a future date on any King Company merchandise.

Begin by preparing the entry to journalize the sale position at the transaction. Do not record the expense related to the sale.

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Gretchen Holden · Answer 1

Descrition Dr. Cr.

Cash 150

Sales Revenue 130

Unearned Revenue 20

Explanation:

Cash Rceived is recorded as full but the reward amount is recorded as unearned revenue as the customer has option to use it in future. Sales Revenue of $130 is recorded which is the net of cash received and reward amount.