FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Depreciation Methods
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Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset…
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Question

Rahe Corp. sold a customer service contract with a price of $20,000 to Peterson Warehousing. Rahe Corp. offered terms of 2/10, n/30 and expects Peterson to pay within the discount period.

Required:

Prepare the journal entry to record the sale using the net method.







Prepare the journal entry assuming the payment is made within 10 days (within the discount period).

 

 

Expert Solution
Check Mark
Step 1

Journal Entry using Net Method:

Peterson Warehousing A/c-----Dr 19600

To Sales A/c 19600

(being credit sales made to Peterson warehousing)

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