1. Sales Discounts (Appendix 5A)

   Sims Company regularly sells merchandise to Lauber Supply on terms 2/15, n/30 and records sales at gross. During a recent month, the two firms engaged in the following transactions:

   1. Sims sold merchandise with a list price of $30,200.
   2. Sims sold merchandise with a list price of $48,000.
   3. Lauber paid for the purchase in Transaction a within the discount period.
   4. Lauber paid for the purchase in Transaction b after the discount period.

   Required:

   1. Provide the journal entries for Sims to record the sales in Transactions a and b.

   (a)	Accounts Payable Accounts Receivable Cash Sales Discounts Sales Revenue
   	Accounts Payable Accounts Receivable Cash Sales Discounts Sales Revenue
   	Record sale
   (b)	Accounts Payable Accounts Receivable Cash Sales Discounts Sales Revenue
   	Accounts Receivable Cash Sales Discounts Sales Returns and Allowances Sales Revenue
   	Record sale

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   2. Provide the journal entry to record the receipt of Lauber's payment in Transaction c. If an amount box does not require an entry, leave it blank.

   (c)	Accounts Payable Accounts Receivable Cash Sales Revenue Unearned Sales Revenue
   	Accounts Payable Accounts Receivable Allowance for Doubtful Accounts Cash Sales Revenue
   	Accounts Payable Accounts Receivable Cash Sales Discounts Sales Revenue
   	Record collection of cash within discount period

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   3. Provide the journal entry to record the receipt of Lauber's payment in Transaction d.

   (d)	Accounts Payable Accounts Receivable Cash Sales Discounts Sales Revenue
   	Accounts Payable Accounts Receivable Cash Notes Receivable Sales Revenue
   	Record collection of cash after discount period

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   4. Conceptual Connection: What implied annual interest rate is Lauber incurring by failing to take the sales discount and, instead, paying the gross amount after 30 days? Assume a 365 day year and round the percentage to one decimal. %

   5-86

   Sloan Systems sells voice mail systems to small businesses. Sloan engaged in the following activities involving notes receivable:

   a.	On October 1, 2019, Sloan sold an $8,000 system to Majors Company. Majors gave Sloan a 7-month, 10% note as payment.
   b.	On November 1, 2019, Sloan sold a $6,000 system to Hadley Inc. Hadley gave Sloan a 10-month, 12% note as payment.
   c.	On May 1, 2020, Majors paid the amount due on its note.
   d.	On September 1, 2020, Hadley paid the amount due on its note.

   	Required:
   	Prepare the necessary journal and adjusting entries for Sloan Systems to record these transactions.