The following transactions occurred between AcrePharmaceuticals and E & S, the pharmacy chain, during Octoberof the current year:
Oct 6 E & S purchased $12,000of merchandise from Acre on credit terms of 3/10, n/30,FOB shipping point. Seperately, E & S paid a $75 bill for freightin. These goods cost Acre $3,600.
Oct 10 E & S returned $3,000 of themerchandise purchased on October 6. Acre accounted for thesales return and placed the goods back in inventory (Acre'scost, $1,200).
Oct 15 E & S paid $6,000 of theinvoice amount owed to Acre for the October 6 purchase, less the discount.
Oct 27 E & S paid the remaining accountowed to Acre for the October 6 purchase.
Requirements
1. Journalize thesetransactions on the books of E & S.
2. Journalizethese transactions on the books of Acre Pharmaceuticals.
Is the discount applied on bothentries?