Question

On March 1, Sather Co. sold merchandise to Boone Co. on account, $29,800, terms 2/15, n/30. The cost of the merchandise sold is $18,300. The merchandise was paid for on March 14.

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.

Chart of Accounts-Sather Co.

CHART OF ACCOUNTS
Sather Co.
General Ledger
ASSETS 110 Cash 121 Accounts Receivable-Boone Co. 125 Notes Receivable 130 Merchandise Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment   LIABILITIES 210 Accounts Payable 218 Sales Tax Payable 219 Customers Refunds Payable 220 Unearned Rent 221 Notes Payable   EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Rent Revenue   EXPENSES 501 Cost of Merchandise Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Chart of Accounts-Boone Co.

CHART OF ACCOUNTS
Boone Co.
General Ledger
ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Merchandise Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment   LIABILITIES 211 Accounts Payable-Sather Co. 218 Sales Tax Payable 219 Customers Refunds Payable 220 Unearned Rent 221 Notes Payable   EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Rent Revenue   EXPENSES 501 Cost of Merchandise Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense

Journal-Sather Co.

Journalize the entries for Sather Co. for the sale on March 1 and payment of the amount due on March 14. Refer to the appropriate company’s Chart of Accounts for exact wording of account titles.

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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2
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Journal-Boone Co.

Journalize the entries for Boone Co. for the purchase on March 1 and payment of the amount due on March 14. Refer to the appropriate company’s Chart of Accounts for exact wording of account titles.

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JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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2
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Answer 1

	Books of Sather Co.
Date	Description	Debit	Credit
1-Mar	Accounts Receivable - Boone Co.	29800
	Sales		29800
	Goods sold to Boone Co. on account
1-Mar	Cost of Merchandise Sold	18300
	Merchandise Inventory		18300
	Transfer of cost to Cost of Merchandise sold
14-Mar	Cash	29204
	Sales Discount	596
	Accounts Receivable - Boone Co.		29800
	Payment terms were 2/15 that is if paid in15 days discount of 2 % will be allowed
	Sales discount is used in this case but it is not mentioned in charts of account
	Books of Boone Co.
1-Mar	Merchandise Inventory	29800
	Accounts Payable - Sather Co.		29800
	Merchandise Inventory purchased on account
14-Mar	Accounts Payable - Sather Co.	29800
	Merchandise Inventory		596
	Cash		29204
	Cash Paid to Sather after adjusting for discount on purchase
	being payment made within time allowed for discount