Question

# Gordon's Grocers purchases bread from Buddy’s Bread Company at \$1.80 per loaf. Gordon's recently engaged in...

Gordon's Grocers purchases bread from Buddy’s Bread Company at \$1.80 per loaf. Gordon's recently engaged in a customer service contract with Buddy's to purchase 464,000 loaves of Buddy's bread. Buddy offered credit to Gordon's at terms of 1/15, n/30. Buddy expects Gordon to pay within the discount period.

Required:

Prepare the journal entry to record the sale using the net method, rounding to the nearest whole dollar.

Hint: In calculating your answer, use one minus the discount rate (eg. 1 - 0.01 = 0.99)

 Accounts Receivable Sales Revenue Record sale

Then, prepare the journal entry assuming the payment is made within 15 days (the discount period). If required, round your answers to nearest whole dollar.

 Cash Accounts Receivable Record collection within discount period

Prepare the journal entry to record the sale using the net method, rounding to the nearest whole dollar.

Hint: In calculating your answer, use one minus the discount rate (eg. 1 - 0.01 = 0.99)

 Accounts Receivable (464000*1.8*99%) 826848 Sales Revenue 826848 Record sale

Then, prepare the journal entry assuming the payment is made within 15 days (the discount period). If required, round your answers to nearest whole dollar.

 Cash 826848 Accounts Receivable 826848 Record collection within discount period

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