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Harwell Company manufactures automobile tires. On July 15, 2018, the company sold 2,000 tires to the Nixon Car Company for $8
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Answer #1
Harwell company - Journal entries ( Net method )
Date Account Title debit ($) 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 ".
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