Answer:
The correct entries are:
Dr Cash $7,296
Dr Sales discount $304
Cr Accounts receivable $7,600
Explanation:
First and foremost, the terms of sales transaction states that 4% cash discount is given if payment is made within the next ten days.
Payment made on 17th of November is within the stipulated ten days and as a result the cash discount is allowed.
The amount to be recorded as cash as (100%-4%)*$7600 =$7296
The balance of $304 is the sales discount allowed
The double entries would be as below:
Dr Cash $7,296
Dr Sales discount $304
Cr Accounts receivable $7,600
