Question

Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 2,000 tires to the Nixon Car Company for $80 each. The terms of the sale were 2/10,n/30. Harwell uses the net method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 ignore cost of goods) and payment on July 23, 2018, 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and payment on August 15, 2018. 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 payment on July 23, 2018. (If no entry is required for a transaction event, select "No journal entry required" in the first account field.) acount fields View transaction list Journal entry worksheet Record the sale of 2,000 tires for $80 each with a term of 2/10, 1/30 under the net method of accounting for cash discounts. Note: Enter debits before credits General Journal Date July 15, 2018 Debit Credit Record entry Clear entry View general Journal

Answer 1

Harwell company - Journal entries ( Net method )
Date	Account Title	debit ($)	Credit ($ )
Jul-15	Accounts receivable ( 2000 * 80 * 98% )	156800
	Sales revenue		156800
Req.1 July 23	Cash	156800
	Accounts receivable ( 2000 * 80 * 98% )		156800
Req.2 Aug.15	Cash ( 2000 * 80 )	160000
	Sales discount forfeited		3200
	Accounts receivable		156800
Note :-	Since the payment is not within 10 days, therefore, the buyer lost
	his discount and the seller will record this as his income now under
	the head " sales discount forfeited ".