Question

Instructions 

On March 1, Sather Co. sold merchandise to Boone Co. on account, $29,800, terms 2/15, n/30. The cost of the merchandise sold is $18,300. 

The merchandise was paid for on March 14. Assume all discounts are taken. 

Required: 

Journalize the entries for Sather Co. and Boone Co. for the sale, purchase, and payment of amount due. Refer to the appropriate company's Chart of Accounts for exact wording of account titles.

Answer 1

		Journal entries in books of Sather co.
Date		Account titles and explanation		Debit(in $)	Credit(in $)
	Mar-01	Accounts Receivable		29,800
		Sales			29,800
		Cost of goods sold		18,300
		Merchandise inventory			18,300
	Mar-14	Cash		29,204
		Sales Discounts($29,800*2%)		596
		Accounts Receivable			29,800
		Journal entries in books of Boone co.
	Mar-01	Merchandise Inventory		29,800
		Accounts Payable			29,800
		Accounts Payable		29,800
		Cash			29,204
		Merchandise inventory			596