1. On June 3, a company sells merchandise with price of $2,000 (Terms: 2/10, net 60....

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Answer:	Journal Entry
	(In the books of seller)

	Gross Method

Date	Account title and explanation	Debit	Credit

Jun-03	Accounts Receivable	$ 2,000
	Sales Revenue		$ 2,000
	(To record sales revenue)
Case 1:
Jun-12	Cash	$ 1,960		(2,000*98%)
	Sales Discount	$ 40		(2,000*2%)
	Accounts Receivable		$ 2,000
	(To record receipt within discount period)
Case 2:
Jun-29	Cash	$ 2,000
	Accounts receivable		$ 2,000
	(To record receipt after discount period)
Case 3:
Jun-12	Cash	$ 980		(1000*98%)
	Sales Discount	$ 20		(1000*2%)
	Accounts Receivable		$ 1,000
	(To record receipt within discount period)

Jun-29	Cash	$ 1,000
	Accounts receivable		$ 1,000
	(To record receipt after discount period)

	Net Method

Date	Account title and explanation	Debit	Credit

	Accounts receivable	$ 1,960		(2,000*98%)
	Sales Revenue		$ 1,960
	(To record sales revenue)

Case 1:
Jun-12	Cash	$ 1,960		(2,000*98%)
	Accounts receivable		$ 1,960
	(To record receipt within discount period)
Case 2:
Jun-29	Accounts receivable	$ 40		(2,000*2%)
	Sales Discounts Forfeited		$ 40
	Cash	$ 2,000
	Accounts receivable		$ 2,000
	(To record receipt after discount period)

Case 3:
Jun-12	Cash	$ 980		(2,000*98%)
	Accounts receivable		$ 980
	(To record receipt within discount period)

Jun-29	Accounts receivable	$ 20		(2,000*2%)
	Sales Discounts Forfeited		$ 20
	Cash	$ 1,000
	Accounts receivable		$ 1,000
	(To record receipt after discount period)

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