On February 3, Smart Company sold merchandise in the amount of $3,900 to Truman Company, with credit terms of 3/10, n/30. The cost of the items sold is $2,725. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is:

Answer and Explanation:

The journal entry is shown below:

Cash ($3,900 × 0.97) $3,783

Sales discount ($3,900 × $0.03)  $117  

    To Account Receivable  $3,900

(Being the cash receipt is recorded)

For recording this, we debited the cash and sales discount as it increased the assets and discount and at the same time it decreased the account receivable

The same is to be considered

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explanation:

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