Question

complete both required parts

Exercise 7-6 (Algo) Cash discounts; the gross method (L07-3] Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,300 tires to the Nixon Car Company for $70 each. The terms of the sale were 2/20, 1/30. Harwell uses the gross method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on August 15, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list Journal entry worksheet Record the sale of 1,300 tires for $70 each with a term of 2/20, n/30 under the gross method of accounting for cash discounts. Note: Enter debits before credits < Prey. 12 of 18 ! Next >

Answer 1

1) Jul-15 91000 Accounts Receivable - Nixon Car Sales 91000 Jul-23 Cash Sales Discount (91000 x 2%) Accounts Receivable - Nixon Car 89180 1820 91000 2) Jul-15 91000 Accounts Receivable - Nixon Car Sales 91000 Jul-23 91000 Cash Accounts Receivable - Nixon Car 91000

There is no discount in the second case because payment has been made after 20 days.