Question

On March 12, Medical Waste Services provides services on account to Grace Hospital for $9,700, terms 2/10, n/30. Grace pays for those services on March 20.

Required:

For Medical Waste Services, record the service on account on March 12 and the collection of cash on March 20.

Answer 1

1. Accounts receivable A/c Dr $9,700

To Service revenue $9,700

(Being service provided is recorded)

2. Cash A/c Dr $9,506

Sales Discount A/c Dr $194 ($9,700 × 2%)

To Accounts receivable A/c $9,700

(Being cash received recorded and the remaining balance is reported to the cash account in the debit side)

Step-by-step explanation:

The journal entries are shown below

On March 12

Accounts receivable A/c Dr $9,700

To Service revenue $9,700

(Being service provided is recorded)

On March 20

Cash A/c Dr $9,506

Sales Discount A/c Dr $194 ($9,700 × 2%)

To Accounts receivable A/c $9,700

(Being cash received recorded and the remaining balance is reported to the cash account in the debit side)