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P & G Auto Parts sells parts to AAA Car Repair during 2021. P&G offers rebates of 3% on purchases up to $80,000 and 6% on purchases above $80,000 if the customer’s purchases for the year exceed $300,000. In the past, AAA normally purchases $400,000 in parts during a calendar year. On March 25, 2021, AAA Car Repair purchased $90,000 of parts.
Required:
1. The journal entry to record the purchase includes a ____________.

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Answer:

Credit to sales revenue for $87,000

Explanation:

So, in the question above we are given the following parameters or information or data in order to be able to solve this question effectively and the data or parameters are;

=> " rebates of 3% on purchases up to $80,000 and 6% on purchases above $80,000 if the customer’s purchases for the year exceed $300,000"

=> "In the past, AAA normally purchases $400,000 in parts during a calendar year."

=>" On March 25, 2021, AAA Car Repair purchased $90,000 of parts."

Hence, the rebates on $80,000 purchases = 80000 × 3/100 = 2,400.

Rebates on purchases greater than $80,000 = (90,000 - 80,000) × 6/100 = 600.

Total rebate= 2400 + 600 = $3000.

Hence, the net sales revenue = sales - rebate = $90,000 - $3000 = $87,000.

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