Cardboard Cutouts Inc. (CCI) sold $7,000 of products to a customer on account to a customer with terms of 2/10, n/30. CCI uses the expected-value method to record its credit sales and management assumes that it is 40% likely that the customer will not take the discount. (Ignore the journal entry that would typically be necessary to record the cost of goods sold and the reduction of inventory.) Record the journal entry to recognize the sale.

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The Answer of Cardboard Cutouts Inc. (CCI) sold $7,000 of products to a customer on account to a customer with terms of 2/10, n/30. CCI uses the expected-value method to record its credit sales and management assumes that it is 40% likely that the customer will not take the discount. (Ignore the journal entry that would typically be necessary to record the cost of goods sold and the reduction of inventory.) Record the journal entry to recognize the sale.