Sales Discounts Taken

Gordon's Grocers purchases bread from Buddy's Bread Company at $1.90 per loaf. Gordon's recently engaged in a customer service contract with Buddy's to purchase 119,000 loaves of Buddy's bread. Buddy offered credit to Gordon's at terms of 1/15, n/30. Buddy expects Gordon to pay within the discount period.

Required:

If an amount box does not require an entry, leave it blank.

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Prepare the journal entry to record the sale using the net method.

Hint: In calculating your answer, use one minus the discount rate (eg. 1 - 0.02 = .98)

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	Record sale

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Then, prepare the journal entry assuming the payment is made within 10 days (within the discount period).

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	Record collection within discount period