On December 1, Macy Company sold merchandise with a selling price of $3000 on account to Mrs. Jorgensen, with terms 4/10, n/30. On December 3, Mrs. Jorgensen returned merchandise with a selling price of $900. Mrs. Jorgensen paid the amount due on December 19. What journal entry did Macy Company prepare on December 19? (Assume all sales are recorded at the net amount.)

Question

Quizplus · Accepted Answer

The correct answer is B because Macy Company offered a 4% discount if the invoice is paid within 10 days of the invoice date. Mrs. Jorgensen paid the invoice within the discount period, so she is eligible for the discount. The amount of the discount is $3000 * 4% = $120. The amount of the payment is $3000 - $120 = $2880. The journal entry to record the payment is:Debit: Cash $2880Credit: Accounts Receivable $2880Credit: Sales Discounts Forfeited $120

On December 1, Macy Company Sold Merchandise with a Selling