On June 3, Bolton plc sold to Arquette Company merchandise having a sales price of 2,000 with terms of 2/10,
On June 3, Bolton plc sold to Arquette Company merchandise having a sales price of £2,000 with terms of 2/10, n/60. An invoice totaling £90, terms n/30, was received by Arquette on June 8 from John Booth Transport Service for the freight cost. On June 12, the company received a check for the balance due from Arquette Company.
a. Prepare journal entries on the Bolton plc books to record sales and receivables for all the events noted above under each of the following bases.
1. Sales and receivables are entered at gross selling price.
2. Sales and receivables are entered at net of cash discounts.
b. Prepare the journal entry under basis (a)(2), assuming that Arquette Company did not remit payment until July 29.
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