E6-3

(Accounting for cash discounts)

On December 12, Woodington sold goods on account for a gross price of $40,000. The terms of the sale were 2/10, n/30. As of December 31, when financial statements were prepared, no payment had been received by Woodington. Full payment was received on January 5 of the fol¬

lowing year.

REQUIRED:

a. Prepare journal entries for these transactions.

b. Assume that full payment was received