Question 6.5: Transactions for Buyer and Seller Sievert Co. sold merchandi......
Transactions for Buyer and Seller
Sievert Co. sold merchandise to Bray Co. on account, $11,500, terms 2/15, n/30. The cost of the merchandise sold is $6,900. Sievert Co. issued a credit memo for $900 for merchandise returned and later received the amount due within the discount period. The cost of the merchandise returned was $540. Journalize Sievert Co.’s and Bray Co.’s entries for the payment of the amount due.
Sievert Co. journal entries:
Cash ($11,500 – $900 – $212) . . . . . . . . . . . . . . . . . . . . . . . 10,388
Sales Discounts [($11,500 – $900) × 2%]. . . . . . . . . . . . . 212
Accounts Receivable—Bray Co. ($11,500 – $900) . . . . 10,600
Bray Co. journal entries:
Accounts Payable—Sievert Co. ($11,500 – $900) . . . . . 10,600
Merchandise Inventory [($11,500 – $900) × 2%] . . . . . 212
Cash ($11,500 – $900 – $212) . . . . . . . . . . . . . . . . . . . . . . . . 10,388