Anthony Company sold Madison Company merchandise on account FOB shipping point,

Question

Anthony Company sold Madison Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Anthony prepaid the $300 shipping charge. Which of the following entries does Anthony make to record this sale?

a. Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000
b. Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000, and
Accounts Receivable-Madison, debit $300; Cash, credit $300
c. Accounts Receivable-Madison, debit $20,500; Sales, credit $20,500
d. Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000, and
Freight Out, debit $300; Cash, credit $300

Explanation / Answer

d. Accounts Receivable-Madison, debit $20,000; Sales, credit $20,000, and
Freight Out, debit $300; Cash, credit $300

is the option

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