Central Company sold goods for $5,000 to Western Company on March 12 on credit.Terms of the sale were 2/10,n/30.At the time of the sale,Central recorded the transaction by debiting accounts receivable for $5,000 and crediting sales revenue for $5,000.Western paid the balance due,less the discount,on March 21.To record the March 21 transaction,Central would debit:

Question

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Central would debit Cash for $4,900 because Western Company paid within the discount period, taking advantage of the 2% discount on the $5,000 invoice, resulting in a payment of $4,900.

Central Company Sold Goods for $5,000 to Western Company on March