Forever Jewelers uses the perpetual inventory system. On April​ 2, Forever sold merchandise with a cost of $ 4 comma 000 for $ 9 comma 000 to a customer on account with terms of 3​/15, ​n/30. Which of the following journal entries correctly records the payment received from the customer on April​ 29?

Question

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Part 1
A.
Cash
8 comma 730
Sales Discounts Forfeited
270
        Accounts Receivable
9 comma 000
B.
Cash
8 comma 730
        Accounts Receivable
8 comma 730
C.
Cash
9 comma 000
        Accounts Receivable
8 comma 730
        Sales Discounts Forfeited
270
D.
Cash
9 comma 000
        Accounts Receivable
9 comma 000

Answer 1

To determine the correct journal entry for payment received from the customer on April 29, we need to analyze the situation based on the sale terms and the date of payment.

• The sale was for $9,000, and the payment terms were 3/15, n/30. This means the customer can take a 3% discount if they pay within 15 days; otherwise, the full amount is due in 30 days.
• The sale was made on April 2. The customer would need to pay by April 17 to take advantage of the discount. Since the payment is being received on April 29, the customer is outside the discount period and must pay the full amount.

Therefore, the customer pays the total amount of $9,000 with no discounts involved.

The correct journal entry will debit Cash for the total amount received ($9,000) and credit Accounts Receivable for the full amount owed ($9,000), since no discount is taken.

Based on the options provided:

Option D is the correct journal entry:

• Cash: $9,000
• Accounts Receivable: $9,000

This option accurately reflects the transaction under these conditions:

D.

Cash                        9,000
        Accounts Receivable                    9,000

So the correct journal entry is D.