Question

Harwell Company manufactures automobile tires. On July 15, 2021, the company sold 1,300 tires to the Nixon Car Company for $50 each. The terms of the sale were 3/10, n/30. Harwell uses the gross method of accounting for cash discounts. Required: 1. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on July 23, 2021. 2. Prepare the journal entries to record the sale on July 15 (ignore cost of goods) and collection on August 15, 2021. 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 collection on July 23, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the sale of 1,300 tires for $50 each with a term of 3/10, n/30 under the gross method of accounting for cash discounts.

Answer 1

1) Journal entry

Date	General Journal	Debit	Credit
July 15	Account receivable (1300*50)	65000
	Sales revenue		65000
July 23	Cash (65000*97%)	63050
	Sales discount	1950
	Account receivable		65000

2) Journal entry

Date	General Journal	Debit	Credit
July 15	Account receivable (1300*50)	65000
	Sales revenue		65000
Aug 15	Cash	65000
	Account receivable		65000