Question

On july 1, cohen co. sold merchandise on account to tracy inc. for $23,000, terms 2/10, n/30. (b on july 8, tracy inc. returned merchandise worth $2,400 to cohen co. (c on july 11, tracy inc. paid for the merchandise.

Answer 1

Cost of goods sold entries will be omitted.
                                                    Debit        Credit
July 1
Accounts Receivable            23,000
                 Sales                                          23,000

July 8
Sales Returns                           2,400
                  Account Receivable               2,400

July 11 (within 10 days from date of purchase, so discount is availed)
23,000 - 2,400 = 20,600
20,600 x 2% = 412
20,600 - 412 = 20,188

Cash                                       20,188
Sales Discount                          412
              Accounts Receviable                   20,600