Royalton Bookstore ordered 1,000 copies of an introductory physics textbook from Prentice Hall on July 17, 20X0. The books were delivered on August 12, at which time a bill was sent requesting payment of $90 per book. However, a 2% discount was allowed if Prentice Hall received payment by September 12. Royalton Bookstore sent the proper payment, which was received by Prentice Hall on September 10. On December 18, Royalton Bookstore returned 60 books to Prentice Hall for a full cash refund.
1. Prepare the journal entries (if any) for Prentice Hall on
(a) July 17,
(b) August 12,
(c) September 10,
(d) December 18. Include appropriate explanations. Assume that Prentice Hall uses the gross method for cash discounts.
2. Suppose this was the only sales transaction in 20X0. Prepare the revenue section of Prentice Hall’s income statement.