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On February 3, Smart Company sold merchandise in the amount of $4,900 to Kennedy Company, with credit terms of 3/10, n/30. The cost of
On February 3, Smart Company sold merchandise in the amount of $4,900 to Kennedy Company, with credit terms of 3/10, n/30. The cost of the items sold is $3,380. Smart uses the perpetual inventory system and the gross method. Kennedy pays the invoice on February 8 and takes the appropriate discount. The journal entry that Smart makes on February 8 is: Multiple Choice Account Title Debit Credit Cash 3,300 Accounts Receivable 3,300 Account Title Debit Credit Cash Sales discounts 4,820 101 Accounts Receivable 4,921 Account Title Debit Credit Cash 4,753 Sales discounts 147 Accounts Receivable 4,900
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