On March 1, Lincoln sold merchandise on account to Windsor Company for $29,200, terms 1/10, net 45. On March 6, Windsor returns merchandise with a sales price of $2,700. On March 11, Lincoln receives payment from Windsor for the balance due. Prepare journal entries to record the March transactions on Lincoln’s books.

                                Journal entries

Date        Account title and explanation      Debit        Credit

Mar 1          Account receivable                    $29,200

                        Sales revenue                                         $29,200

Mar 6        Sales return and allowance         $2,700

                         Account receivable                                $2,700

Mar 11         Cash                                             $26,235

                  ($26,500 * 99%)

                  Sales discount                              $265

                           Account receivable                              $26,500

                           ($29,200 - $2,700)