Question

34) 34) On March 12, Klein Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system and the gross method of accounting for sales. Babson pays the invoice on March 17, and takes the appropriate discount. The journal entry that Klein makes on March 17 is: A) Cash 4,410 Sales discounts 90 Accounts receivable 4,500 B) Cash Accounts receivable 7,644 7,644 C) Cash Accounts receivable 7,800 7,800 D) Cash Sales discounts Accounts receivable 7,644 156 7,800 E) Cash Accounts receivable 4,500 4,500

Answer 1

Answer- The journal entry that Klein makes on March 17 is as follows-

S.No.	ACCOUNTS TITLES & EXPLANATION	DEBIT	CREDIT
		$	$
1	Cash ($7800 - $156)	7644
	Sales discounts ($7800*2%)	156
	Accounts Receivable		7800
	(Being entry recorded)