2) Gross method & Net method of accounting for cash discounts. Examples: Oswego Clay Pipe Company sold $46,000 of pipe to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60.

Oswego uses the gross method of accounting for cash discounts.

1. What entry would Oswego make on April 12?

Accounts receiable 46000

sales 46000

2. What entry would Oswego make on April 23, assuming the customer made the correct payment on that date?

Cash 45540

Sales Discount 460

Accounts receiable 46000

3. What entry would Oswego make on June 10, assuming the customer made the correct payment on that date?

Cash 46000

Account Recieable 46000

How do you you get 45540 and 460?