The payment terms are 2/10, n/30, and the invoice is dated August 1. On August 1, a customer purchases 56 tablet computers on credit.
Sales Discount Transaction Journal Entries
#Periodic inventory method full#
No discount was offered with this transaction thus the full payment of $15,000 occurs. The credit terms were n/15, which is net due in 15 days. The following entry occurs.Īccounts Receivable decreases (credit) and Cash increases (debit) for the full amount owed. On July 17, the customer makes full payment on the amount due from the July 7 sale. In the second entry, Merchandise Inventory-Desktop Computers decreases (credit), and COGS increases (debit) for the cost of the computers, $8,000 ($400 × 20). Since the computers were purchased on credit by the customer, Accounts Receivable increases (debit) and Sales increases (credit) for the selling price of the computers, $15,000 ($750 × 20). The credit terms are n/15 with an invoice date of July 7. On July 7, CBS sells 20 desktop computers to a customer on credit. COGS increases (debit) and Merchandise Inventory-Packages decreases (credit) for the cost of the packages, $6,200 ($620 × 10). In the second entry, the cost of the sale is recognized. In the first entry, Cash increases (debit) and Sales increases (credit) for the selling price of the packages, $12,000 ($1,200 × 10). On July 1, CBS sells 10 electronic hardware packages to a customer at a sales price of $1,200 each.
(attribution: Copyright Rice University, OpenStax, under CC BY-NC-SA 4.0 license) Cash and Credit Sales Transaction Journal Entries
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