On October 1,Robertson Company sold inventory in the amount of $5,800 to Alberta,Inc.with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses a periodic inventory system.Alberta pays the invoice on October 8 and takes the appropriate discount.What journal entry will be recorded by Robertson on October 8?
A) Debit Cash and credit Accounts Receivable for $5,800
B) Debit Cash and credit Accounts Receivable for $4,000
C) Debit Cash for $3,920, debit Sales Discounts for $80, and credit Accounts Receivable for $4,000
D) Debit Cash for $5,684, debit Sales Discounts for $116, and credit Accounts Receivable for $5,800

Question

Quizplus · Accepted Answer

Alberta pays within the discount period, so they receive a 2% discount on $5,800, which is $116. Therefore, the cash received is $5,684 ($5,800 - $116). The entry records the cash received, the discount taken, and the reduction in accounts receivable.

On October 1,Robertson Company Sold Inventory in the Amount of $5,800