Answer:
Journal entries for Pharoah Co.
On June 1, 2017, when it made the Sale, the Journal entries are as follows:
Trade Receivables $ 50,400 (debit)
Revenue $ 50,400 (credit)
Being Recognition of Sale
On June 12, 2017, when Pharoah Co, received full payment for the June 1 sale
Discount Allowed $ 1,512 (debit)
Trade Receivables $ 1,512 (credit)
Being Discount Allowed Recognised with Payment
Cash $ 48,888 (debit)
Trade Receivables $ 48,888 (credit)
Being Discount Allowed Recognised with Payment
Explanation:
journal entries for Pharoah Co.
Pharoah Co. offers a 3% cash discount when the full payment is received within 15 days, 45 days being the settlement days for all sells on Account according to their terms of 3/15, n/45
On June 1, 2017, when it made the Sale, the Journal entries are as follows:
Trade Receivables $ 50,400 (debit)
Revenue $ 50,400 (credit)
On June 12, 2017, when Pharoah Co, received full payment for the June 1 sale
Payment falls within the 15 days in which Pharaoh gives a cash discount . Thus the payment qualifies for a cash discount.
Discount Allowed $ 1,512 (debit)
Trade Receivables $ 1,512 (credit)
Being Discount Allowed Recognised with Payment
Cash $ 48,888 (debit)
Trade Receivables $ 48,888 (credit)
Being Discount Allowed Recognised with Payment
