Sayers Co. sold merchandise on account to a customer for $80,000 terms 2/10, n/30. The cost of the goods sold was $58,000. a. Journalize Sayers’ entries to record the sale. b. Journalize the receipt of payment within the discount period. c. Journalize the entry to record the receipt of payment beyond the discount period of ten days.

a. Journalize Sayers’ entries to record the sale

1. Debit Cost of good sold $58,000

Credit Merchandise $58,000

2.

Debit Accounts Receivable $80,000

Credit Revenue $80,000

b. Journalize the receipt of payment within the discount period

Debit Cash $78,400

Debit Sales Discount $1,600

Credit Receivable Accounts $80,000

c.

Debit Cash $80,000

Credit Receivable Accounts $80,000

Explanation:

The terms of 2/10, n/30 means 2% discount for the payment within 10 days and the full amount to be paid within 30 days.

a. When Sayers Co. sold merchandise, there are 2 entries record the sales:

1. Debit Cost of good sold $58,000

Credit Merchandise $58,000

2.

Debit Accounts Receivable $80,000

Credit Revenue $80,000

b. Sayers received of payment within the discount period:

Sayers offered the discount:

2% x $80,000 = $1,600

Cash Sayers Co. received: $80,000 - $1,600 = $78,400

The journal entry:

Debit Cash $78,400

Debit Sales Discount $1,600

Credit Receivable Accounts $80,000

c. The receipt of payment beyond the discount period of ten days:

There was no discount offered or received.

The journal entry:

Debit Cash $80,000

Credit Receivable Accounts $80,000

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