Exercise $7-5($Algo$)$ Trade and cash discounts; the gross method and the net

method compared $[$LO$7-3]$

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Tracy Company, a manufacturer of air conditioners, sold $125$ units to Thomas Company on

November $17,2024.$ The units have a list price of $$720$ each, but Thomas was given a $30\%$

trade discount. The terms of the sale were $\frac{2}{10},\frac{n}{30}.$

Exercise $7-5($Algo$)$ Part $3$

$3-$a$.$ Prepare the journal entries to record the sale on November $17($ignore cost of goods$)$ and collection on

November $26,2024,$ assuming that the net method of accounting for cash discounts is used.

$3-$b$.$ Prepare the journal entries to record the sale on November $17($ignore cost of goods$)$ and collection on

December $15,2024,$ assuming that the net method of accounting for cash discounts is used.

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