On February 3, Smart Company sold merchandise in the amount of $2200 to Truman Company, with credit terms of 3/10, n/30. The cost of the items sold is $1520. 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:
A.
| Cash | 1520? | |
| Accounts receivable | 1520? |
B.
| Cash | 1440? | |
| Accounts receivable | 1440? |
C.
| Cash | 2200? | |
| Accounts receivable | 2200? |
D.
| Cash | 2120? | |
| Sales discounts | 46? | |
| Accounts receivable | 2166? |
E.
| Cash | 2134? | |
| Sales discounts | 66? | |
| Accounts receivable | 2200? |
Answer: E
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