Answer:
A sales transaction of $5,000 provides the customer a cash discounts of 2/15, n/30. If the firm adopts the net method to account for the transaction initially and the customer did not take advantage of the discount within 15 days, the journal entry on the date of payment involves ______________
Debit Accounts Receivable $100
Credit Sales Revenue $100
To reverse the cash discount.
Debit Cash $5,000
Credit Accounts Receivable $5,000
To record the receipt from customer on account.
Explanation:
The first journal entry involves the reversal of the discount. The second set involves the receipt of cash from the customer.
The cash discount of $100 is calculated as 2% of $5,000.
