What is the journal entry for an invoicegetting paid in discount?

pready

There are Two methods for Cash Discounts (Sales Discounts)
Example: Sales of $10,000, terms 2/10, n/30

Method 1 Gross Method
to record original sale:
Debit Accounts Receivable for 10,000
Credit Sales for 10,000

to record full pyament within discount period:
Debit Cash for 9,800
Debit Sales Discounts for 200
Credit Accounts Receivable for 10,000

to record full payment after discount period:
Debit Cash for 10,000
Credit Accounts Receivable for 10,000

Method 2 - Net Method
to record original sale:
Debit Accounts Receivable for 9,800
Credit Sales for 9,800

to record full payment within discount period:
Debit Cash for 9,800
Credit Accounts Receivable for 9,800

to record full payiment after discount period:
Debit Accounts Receivable for 200
Credit Sales Discounts Forfeited for 200

Debit Cash for 10,000
Credit Accounts Receivable for 10,000

ricamee

meaning of journalizing

pready

my answers provided are the Journal Entries that will be made for each method used either from the Gross Method or the Net method.