Question

On March 1, Sather Co. sold merchandise to Boone Co. on account, $31,800, terms 2/15, n/30. The cost of the merchandise sold is $19,000. The merchandise was paid for on March 14. Assume all discounts are taken. 

Required: 

Journalize the entries for Sather Co. and Boone Co. for the sale, purchase, and payment of amount due. Refer to the appropriate company's Chart of Accounts for exact wording of account titles.

Answer 1

	Sather Co.
Date	Accounts title and explanations	Debit $	Credit $
Mar. 1	Accounts Receivable - Boone Co.	$ 31,800
	Sales		$ 31,800
	(To record the merchandise Sold )
Mar. 1	Cost of Merchandise Sold	$ 19,000
	Merchandise Inventory		$ 19,000
	(To record the Cost of merchandise sold )
Mar. 14	Cash ( $ 31,800 x 98% )	$ 31,164
	Sales Discount ( $ 31,800 x 2% )	$ 636
	Accounts Receivable - Boone Co.
	(To record the Collection )		$ 31,800

	Boone Co.
Mar. 1	Merchandise Inventory	$ 31,800
	Accounts Payable - Sather Co.		$ 31,800
	(To record the merchandise purchase )
Mar. 14	Accounts Payable - Sather Co.	$ 31,800
	Merchandise Inventory		$ 636
	Cash		$ 31,164
	(To record the Payment )