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Question - Tracy Company, a manufacturer of air conditioners, sold 150 units to Thomas Company on November 17, 2021. The units have a list price of $640 each, but Thomas was given a 25% trade discount. The terms of the sale were 2/10, n/30.
Required -
1. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2021, assuming that the gross method of accounting for cash discounts is used.
2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2021, assuming that the gross method of accounting for cash discounts is used.
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