Answer and Explanation:
Culver Co.
Journal Entries
Debit Credit
June 1, 2020 Accounts receivables $51,000
Sales $51,000
Recording sale of goods on credit.
June 12, 2020 Bank $48,960
Sales discount (Working 1) $2,040
Accounts receivables $51,000
Recording cash received from customer.
Working 1:
As per the terms of sale, the customer receives 4% cash discount if the payment is made within 15 days. The customer makes the payment on the 12th day, and thus, receives 4% cash discount.
Cash discount = 4% x $51,000 = $2,040
Amount received from customer = $51,000 - $2,040 = $48,960
