Question

Check my work 11 Part 2 of 2 Required information Exercise 7-5 (Algo) Trade and cash discounts; the gross method and the net method compared (LO7-3] [The following information applies to the questions displayed below.) points Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2021. The units have a list price of $700 each, but Thomas was given a 20% trade discount. The terms of the sale were 3/10, n/30. 02:34:09 Exercise 7-5 (Algo) Part-2 eBook 3-a. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the net method of accounting for cash discounts is used. 3-b. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the net method of accounting for cash discounts is used. Print

Answer 1

	Net of trade discount price	56000		=(100*700)*(1-20%)
3a
Date	General Journal	Debit	Credit
November 17, 2021	Accounts receivable	54320		=56000*(1-3%)
	Sales revenue		54320
November 26, 2021	Cash	54320
	Accounts receivable		54320
3b
Date	General Journal	Debit	Credit
November 17, 2021	Accounts receivable	54320
	Sales revenue		54320
December 15, 2021	Cash	56000
	Accounts receivable		54320
	Interest revenue		1680