Question

Larkspur Co. uses the gross method to record sales made on credit. On June 1, 2020, it made sales of $64,000 with terms 2/15, n/45. On June 12, 2020, Larkspur received full payment for the June 1 sale. Prepare the required journal entries for Larkspur Co. (If no entry is required, select "No Entry"for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit

Answer 1

Journal Entries
Sr. No.	Date	Account Title and explanation	Debit	Credit
1	June 01, 2020	Account Receivable	$64,000
		Sales Revenue		$64,000
2	June 12, 2020	Cash ($ 64,000 X 98%)	$62,720
		Discount on Sales	$1,280
		Account Receivable		$64,000
	Note: Term 2/15 , Net 45 Means if payment is made within 15 days than there is discount of 2% is allowed and
		normal credit period for payment is 45 Days