Journal Entries for Acme Marine Supply Company

How did Acme Marine Supply Company record the transactions with Ivanhoe Marine Company?

What journal entries were made for the sale of merchandise, return of goods, and payment received?

Journal Entries for Acme Marine Supply Company:

Debit Accounts Receivable $3,000

Credit Sales $3,000

Debit Sales Returns and Allowances $660

Credit Accounts Receivable $660

Debit Cash (amount received)

Credit Accounts Receivable (amount received)

Acme Marine Supply Company recorded the transactions with Ivanhoe Marine Company by making appropriate journal entries. When Ivanhoe Marine Company purchased $3,000 of merchandise with terms n/30, Acme Marine Supply Company debited Accounts Receivable for $3,000 and credited Sales for $3,000.

Upon returning $660 worth of goods for full credit, Acme Marine Supply Company debited Sales Returns and Allowances for $660 and credited Accounts Receivable for $660 to account for the return.

Finally, when Ivanhoe Marine Company paid the account in full, Acme Marine Supply Company debited Cash for the amount received and credited Accounts Receivable for the same amount.

These journal entries reflect the proper recording of transactions between the two companies and ensure accurate financial reporting.