On June 13 of the current year, Kensington Factory sold merchandise to a customer for $8,000 with credit terms 2/10, n/30. The customer paid the full amount due on June 20. Kensington uses the gross method of accounting for cash discounts. Prepare the appropriate journal entry dated June 20.

Question

Philip

Mathematics

1 March, 22:06

On June 13 of the current year, Kensington Factory sold merchandise to a customer for $8,000 with credit terms 2/10, n/30. The customer paid the full amount due on June 20. Kensington uses the gross method of accounting for cash discounts. Prepare the appropriate journal entry dated June 20.

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Answers (1)

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Cameron Nguyen · Answer 1

General Journal are given below

Step-by-step explanation:

given data

credit terms = 2/10, n/30

Factory sold = $8,000

solution

as here we get Sales Discount that will be

Sales Discount = 2% of Factory sold price

Sales Discount = 2% * $8000

Sales Discount = $160

so Cash debit will be = $8,000 - $160 = $7,840

so General Journal will be as

Event General Journal Debit credit

1 Cash $7,840

Sales Discount $160

Accounts receivables $8,000