Answer:
Debit Bank for $2,058, Purchase Return for $600, and Discount allowed for $42; while Credit Accounts receivable for $2,700.
Explanation:
Sales after return before discount = $2,700 - $600 = $2,100
Discount allowed = $2,100 * 2% = $42
Check amount = $2,100 - $42 = $2,058
This implies that $2,058 is received in cash and the journal entries upon receipt of check will be as follows:
Details Dr ($) Cr ($)
Bank 2,058
Discount allowed 42
Purchases return 600
Accounts receivable 2,700
To record check received from and discount allowed to Splish Brothers Inc.
