The following transactions are for Alonzo Company.
1. On December 3, Alonzo Company sold $500,000 of merchandise to Arte Co., terms 1/10, n/30. The cost of the merchandise sold was $330,000.
2. On December 8, Arte Co. was granted an allowance of $25,000 for merchandise purchased on December 3.
3. On December 13, Alonzo Company received the balance due from Arte Co.
Instructions
(a) Prepare the journal entries to record these transactions on the books of Alonzo Company. Alonzo uses a perpetual inventory system.
(b) Assume that Alonzo Company received the balance due from Arte Co. on January 2 of the following year instead of December 13. Prepare the journal entry to record the receipt of payment on January 2.