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Prepare journal entries for the following transactions for Chillee Company: A. Chillee sold consulting services on...

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Accounting

Prepare journal entries for the following transactions forChillee Company: A. Chillee sold consulting services on account toa customer RST for $3,000, terms 2/10, n/30. B. Customer RST wasnot completely satisfied with the services he received, so Chilleegranted an allowance of $200. C. The customer RST paid the amountowed to Chillee within the discounted period. D. Chillee lent $1000to an employee who signed a 2 month note with an interest rate of10% E. The employee in "d" above paid the note plus interest at theend of the second month.

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Solution:

Journal Entries

Transaction General Journal Debit Credit
A Account Receivable $        3,000.00
Service Revenue $      3,000.00
( To record service on account)
B Service/Sales Allowance $            200.00
Accounts Receivable $          200.00
( To record service allowance)
C Accounts Receivable $        2,800.00
Sales Discount [2800*2/100] $            56.00
Cash [ 2800- 56 ] $      2,744.00
( To record sales returns)
D Notes Receivables-Short Term [@10%, 2 Month] $        1,000.00
Cash $      1,000.00
( To record notes receivables grant to employee)
E Cash $        1,016.67
Notes Receivables-Short Term [@10%, 2 Month] $      1,000.00
Interest Revenue [1000*10/100*2/12] $            16.67
( To record notes receivables collection)

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