The reduction or discount of 50 that Y allows is an expense to him as he gets only 2 950 on settlement of the amount due. On receipt of the amount, the journal entry in the books of Y is: 950 50 Cash Alc Dr. Discount A/C Dr. X Alc (The cash received and discount allowed) On payment of cash, the entry in the books of X is: 1,000 950 Y A/C Dr. 1,000 Q6 Cash Alc Discount A/C 50 (Cash paid and discount earned) Mustration 3 Journalise the following transactions, prepare ledger accounts and also prepare a Trial Balance. 2004 Feb. 1. Dinesh started business with cash 4,000, furniture 2,000 and stock of goods 8,000 2 Purchased goods from Alex + 5,000 at a trade discount of 10% 3 Sold goods to Binoy 6,000 at a trade discount of 5% 5 Sold goods for cash 9,000 7 Purchased goods for Cash 6,000 9 Paid to Alex 2,000; Discount allowed by him 200 17 Received from Binoy 4,000; allowed him a discount of 300 25 Withdrew for personal purpose 300 26 Paid rent 600 26 Received commission 100 27 Sold goods to Christi 3,000 28 Purchased goods from Dani 2,000