Sather Co. sold merchandise to Boone Co. on account, $31,800, terms 2/15, n/30. The cost of the merchandise sold is $19,000. Journalize the entries for Sather Co. and Boone Co. for the sale, purchase, and payment of amount due. Assume all discounts are taken.
Answer:
Sather Co. journal entries:
Accounts Receivable—Boone Co. 31,164 Sales 31,164 [$31,800 – ($31,800 × 2%)] Cost of Merchandise Sold 19,000 Merchandise Inventory 19,000 Cash 31,164 Accounts Receivable—Boone Co. 31,164 Boone Co. journal entries:
Merchandise Inventory [$31,800 – ($31,800 × 2%)] 31,164 Accounts Payable—Sather Co. 31,164 Accounts Payable—Sather Co. 31,164 Cash 31,164
