On 1 December 2020, Sheba’s bank balance was $3 700 credit. The transactions for the month of December 2020 were as follows:

December 5 Received and banked a cheque, $10 950, from M. Merick, a credit customer. He had deducted a trade discount of $270.

                 7 Paid a cheque to Fray Ltd, a supplier, in full settlement of his account of $4 800 less 2% cash discount.

                9 Harry, a credit customer, paid his debt of $5 000 by cheque after deducting a cash discount of 5%.

20.               20  Received $4 000 by cheque from D. Armstrong.
21.                21   Paid utilities by cheque, $1 200.

              26 The bank returned the cheque received from D. Armstrong as he did not have sufficient funds.

1. prepare the cash book for the month ending 31 December 2020. Bring down the balance on 1 January 2021.
2. 
   
3. Sheba’s books show a total discount received of $500 for the 11 months from 1 January 2020 to 30 November 2020. Prepare the discount received account for the year ended 31 December 2020. Show the year end transfer to the appropriate financial statement.