Douglas Corporation reports it sold merchandise on account for a total of $$800,000$ for the current year. The cost to Douglas for the merchandise was $$300,000.$ To encourage early payment, Douglas offers its customers credit terms of $\frac{\mathrm{}}{\mathrm{}\mathrm{}}1/10,\frac{}{\mathrm{}\mathrm{}}n/30.$ At year$-$end, there is $$150,000$ of sales on account still eligible for the $1$ percent discount. Douglas believes that all customers will pay within the discount period to receive the discount. Prepare the adjusting journal entry needed for Douglas Corporation to comply with the new revenue recognition standard. Assume Douglas's fiscal year$-$end is December $31.$

Answer rating: 100% (QA)

Adjusting Journal Entry for Douglas Corporation Since Douglas offers a credit term with a discount f... View the full answer