Sales Transactions: Buckaroo Company and Yearling Company entered into the follo

Question

Sales Transactions:

Buckaroo Company and Yearling Company entered into the following transactions:

a.  Buckaroo Company sold merchandise to Yearling Company for $135,000, terms 2/10, n/30

.
b. Prior to payment, Yearling Company returned $14,000 of the merchandise for credit.

c. Yearling Company paid Buckaroo Company in full within the discount period.

d.  Yearling Company paid Buckaroo Company in full after the discount period. [Assume
that transaction (c) did not occur.]

Required:
Prepare journal entries to record the transactions for Buckaroo Company (the seller).

Explanation / Answer

S. NO. PARTICULARS DEBIT CREDIT A Yearling Co. A/C 135000     To Sales A/C 135000 [Sold goods on credit with terms 2/10, n/30.] B Sales Return A/C 14000     To Yearling Co. A/C 14000 [Sales Return from Yearling Co.] C Bank A/C 118580 Discount Allowed A/C 2420     To Yearling Co. A/C 121000 [Providing discount of 2% as net payment made within 10 days.] D Bank A/C 121000     To Yearling Co. A/C 121000

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