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On March 12, Fret Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, 1/30. The cost of the
On March 12, Fret Company sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, 1/30. The cost of the items sold is $4,500. Fret uses the perpetual inventory system and the gross method of accounting for sales. Babson pays the invoice on March 17 and takes the appropriate discount. The Journal entry that Fret makes on March 17 is: Multiple Choice Credit Account Title Cash Accounts Receivable Debit 4,500 4.500 Credit Account Title C Sales Discounts Accounts Receivable Dobit 7,644 156 7,800 Credit Account Title Cash Accounts Receivable Debit 7,800 7.800 O Credit Account Title Cash Accounts Receivable Debit 7,644 7,644 Credit Account Title Cash Sales Discounts Accounts Receivable Debit 4,410 90 4,500
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