**PA1. LO 6.1 Record Journal Entries for Furniture Warehouse Transactions**A. **Aug. 3:** Sold 15 couches at $500 each to a customer, with credit terms 2/15, n/30, and an invoice date of August 3. The couches cost Furniture Warehouse $150 each.B. **Aug. 8:** A customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost.C. **Aug. 15:** A customer found 4 defective couches but kept the merchandise for an allowance of $1,000.D. **Aug. 18:** The customer paid their account in full with cash.

Journal entries are made to record the financial transactions in the books. It is the second step in the accounting cycle after identifying the financial transactions. Once the journal entries are made, they are posted to the ledgers. Ledgers are used to prepare the trial balance of the firm.Working: Sales discount = Accounts receivable x discount rate = ($7500-1000-1000)*2% = $110 Date Account Titles debit Credit Aug 3 Accounts receivable (500*15) $7500 Sales revenue $7500 Aug 3 Cost of goods sold (15*150) 2250 Inventory 2250 Aug. 8 Sales return (2*500) 1000 Accounts receivable 1000 Aug. 8 Inventory (2*150) 300 Cost of goods sold 300 Aug 15 Sales return and allowance 1000 Accounts receivable 1000 Aug 18 Cash 5390 Sales discount 110 Accounts receivable ($7500-1000-1000) 5500

Business

Accounting

PA1. LO 6.1 Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. B. Aug. 8: Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. C. Aug. 15: Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. D. Aug. 18: Customer paid their account in full with cash.

PA1. LO 6.1 Record journal entries for the following transactions of Furniture Warehouse. A. Aug. 3: Sold 15 couches at $500 each to a customer, credit terms 2/15, n/30, invoice date August 3; the couches cost Furniture Warehouse $150 each. B. Aug. 8: Customer returned 2 couches for a full refund. The merchandise was in sellable condition at the original cost. C. Aug. 15: Customer found 4 defective couches but kept the merchandise for an allowance of $1,000. D. Aug. 18: Customer paid their account in full with cash.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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