On June 1, Target sold 100 HP laptops to UCF for $500 each with terms of 3/15, n30. On June 11, UCF paid their invoice and took the discount. What journal entry (debit and credit) should Target record on June 11? (Select all answers that apply)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Educational Website Transcription:**

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**Scenario:**

On June 1, Target sold 100 HP laptops to UCF for $500 each with terms of 3/15, n/30. On June 11, UCF paid their invoice and took the discount. What journal entry (debit and credit) should Target record on June 11? (Select all answers that apply)

**Options:**

1. Debit Sales Discounts $1,500
2. Credit Sales Revenue $48,500
3. Credit Sales Discounts $1,500
4. Debit Accounts Receivable $48,500
5. Credit Accounts Receivable $50,000
6. Debit Cash $48,500
7. Debit Accounts Receivable $50,000
8. Credit Accounts Receivable $48,500
9. Credit Sales Revenue $50,000
10. Debit Cash $50,000

**Explanation of Terms:**

- **3/15, n/30**: This indicates that a 3% discount is available if the invoice is paid within 15 days; otherwise, the net amount is due within 30 days.

**Calculation of Discount:**

- **Total Sale Amount**: 100 laptops x $500 = $50,000
- **Discount**: 3% of $50,000 = $1,500
- **Amount after Discount**: $50,000 - $1,500 = $48,500

**Correct Journal Entries on June 11:**

- **Debit**: Sales Discounts $1,500 (to account for the discount taken by UCF)
- **Debit**: Cash $48,500 (the net amount received)
- **Credit**: Accounts Receivable $50,000 (to clear the receivable balance)

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Transcribed Image Text:**Educational Website Transcription:** --- **Scenario:** On June 1, Target sold 100 HP laptops to UCF for $500 each with terms of 3/15, n/30. On June 11, UCF paid their invoice and took the discount. What journal entry (debit and credit) should Target record on June 11? (Select all answers that apply) **Options:** 1. Debit Sales Discounts $1,500 2. Credit Sales Revenue $48,500 3. Credit Sales Discounts $1,500 4. Debit Accounts Receivable $48,500 5. Credit Accounts Receivable $50,000 6. Debit Cash $48,500 7. Debit Accounts Receivable $50,000 8. Credit Accounts Receivable $48,500 9. Credit Sales Revenue $50,000 10. Debit Cash $50,000 **Explanation of Terms:** - **3/15, n/30**: This indicates that a 3% discount is available if the invoice is paid within 15 days; otherwise, the net amount is due within 30 days. **Calculation of Discount:** - **Total Sale Amount**: 100 laptops x $500 = $50,000 - **Discount**: 3% of $50,000 = $1,500 - **Amount after Discount**: $50,000 - $1,500 = $48,500 **Correct Journal Entries on June 11:** - **Debit**: Sales Discounts $1,500 (to account for the discount taken by UCF) - **Debit**: Cash $48,500 (the net amount received) - **Credit**: Accounts Receivable $50,000 (to clear the receivable balance) ---
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