Question

Journalize the following sales transactions for King Company.
King Company sold merchandise inventory for $150. The cost of the inventory was $90. The customer paid cash.
King Company was running a promotion and the customer received a $ 20 award at the time of sale that can be used at a future date on any King Company merchandise.
Begin by preparing the entry to journalize the sale position at the transaction. Do not record the expense related to the sale.

Answer 1

Answer:

Descrition                  Dr.       Cr.

Cash                          150

Sales Revenue                     130

Unearned Revenue              20

Explanation:

Cash Rceived is recorded as full but the reward amount is recorded as unearned revenue as the customer has option to use it in future. Sales Revenue of $130 is recorded which is the net of cash received and reward amount.