Do you know about accounting and journalizing??

Question

I need to record this transaction in a general journal:
"Granted credit to Washington High School for damaged merchandise, $89.00 from S25, CM9"

I'm not sure what accounts to credit or debit.
Any help would be much appreciated!
Thanks

Answer 1

The credit granted to Washington HS is a liability so it will have a credit balance.

You could create an expense account that can be debited for the amount. Expenses have debit balances since they take away from revenue/income accounts that have credit balances:

Damage Expense (debit) $89.00

----- Liability to Washington HS (credit) -- $89.00

Answer 2

The debit would not be damage expense, it would go against a reserve against sales, so the 2nd person that answered is correct.

You would debit Sales Returns & Allowances and credit either Accounts Receivable (if they have a credit account) or Customer Liability.

I am the Controller for a retailer and that is how we would record it. If the School does not have a credit account, then we use a Customer Liability account to record credits due to our customers.

Answer 3

Assuming that they have an open receivable account, the j/e would be debit to "sales returns/allowances" $89, and credit "accounts receivable-Washington HS" $89