GameGirl, Inc.
Journal Entries:
August 6:
Debit Accounts Receivable (DS Unlimited) $14,000
Credit Sales Revenue $14,000
To record the sale of handheld game devices, terms 1/10, net 60.
Debit Cost of Goods Sold $12,600
Credit Inventory $12,600
To record the cost of goods sold.
August 10:
Debit Sales Returns $1,200
Credit Accounts Receivable (DS Unlimited) $1,200
To record the return of six game devices.
Debit Inventory $1,080
Credit Cost of goods sold $1,080
To record the cost of goods returned.
August 14:
Debit Cash Account $12,672
Debit Cash Discount Allowed $128
Credit Accounts Receivable (DS Unlimited) $12,800
To record the receipt on account.
Explanation:
Gamegirl records the transactions in its accounting books as they occur. Journal entries identify the accounts to be debited or credited for each transaction.