ted balanc Receivab OT company has an unac $25,000 and an unadjusted credit balance of $10 in Allowance for Sales Discounts as of December 31. Of the $25,000 of receivables, $10,000 are within a 2% discount period that the company expects the buyers to take. te: Enter debits before credits. Date 12/31 General Journal Debit Credit
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
![### Journal Entry for Sales Discounts
**Background Information:**
The company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $10 in Allowance for Sales Discounts as of December 31. Of the $25,000 of receivables, $10,000 are within a 2% discount period that the company expects the buyers to take.
**Journal Entry Instruction:**
- Note: Enter debits before credits.
---
**General Journal Entry:**
| Date | General Journal | Debit | Credit |
|--------|-------------------------|-------|--------|
| 12/31 | | | |
| | | | |
| | | | |
| | | | |
| | | | |
This template requires entries to be recorded under the "General Journal" column. Here is how you might enter the expected discount:
- **General Journal Details:** Enter "Sales Discounts" and related account.
- **Debit and Credit Entries:** Adjust the debit and credit amounts according to the 2% expected discount on $10,000, which results in a $200 sales discount.
Therefore, your entry in the journal should adjust for this expected discount by debiting "Sales Discounts" and crediting "Allowance for Sales Discounts" accordingly.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce414cf0-3510-4369-b07b-737dca602a2e%2Ff80bb651-c511-46df-b3d3-2d92084f3c39%2Fp66h7z7_processed.png&w=3840&q=75)
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