Question

Exercise 8-03 Your answer is partially correct. Try again. Presented below are two independent situations. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) (a) (b) On January 6, Brumbaugh Co. sells merchandise on account to Pryor Inc. for $7,000, terms 2/10, n/30. On January 16, Pryor Inc. pays the amount due. Prepare the entries on Brumbaugh's books to record the sale and related collection. (Omit cost of goods sold entries.) On January 10, Andrew Farley uses his Paltrow Co. credit card to purchase merchandise from Paltrow Co. for $9,000. On February 10, Farley is billed for the amount due of $9,000. On February 12, Farley pays $5,000 on the balance due. On March 10, Farley is billed for the amount due, including interest at 1% per month on the unpaid balance as of February 12. Prepare the entries on Paltrow Co.'s books related to the transactions that occurred on January 10, February 12, and March 10. (Omit cost of goods sold entries.)

Answer 1

No	Date	Account titles	Debit	Credit
a	Jan-06	Accounts Receivable	7,000.00
		Sales Revenue		7,000.00
	Jan-16	Cash	6,860.00
		Sales Discounts	140.00
		Accounts Receivable		7,000.00
b	Jan-10	Accounts Receivable	9,000.00
		Sales Revenue		9,000.00
	Feb-12	Cash	5,000.00
		Accounts Receivable		5,000.00
	Mar-10	Accounts Receivable	40.00
		Interest Revenue		40.00