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11 September, 16:49

Global Company purchased merchandise on account from Planet Company for $56,000 with terms 1/15, net 45. Global Company returned $6,000 of the merchandise and received full credit from Planet Company. What will be included in the journal entry for the payment (assume that the amount due was paid within the discount period) ?

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  1. 11 September, 17:18
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    cash 49,500 debit

    discount 500 debit

    account receivable 50,000 credit

    Explanation:

    account receivable 56,000

    sales revenue 56,000

    to record sales

    returns 6,000

    account receivable 6,000

    to record return of goods

    56,000

    -6,000 return

    50,000 account receivable

    x1% discount 500 (payment within discount period)

    50,000 - 500 = 49,500 cash proceed
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