Before passing Journal Entry for Discount Received, we have to know about the meaning of discount and its type.

### Meaning:

The **Discount Received** means the purchase of goods less than its selling price.So, it is the gain of the buyer of the goods according to Nominal rule he will credit the discount Received A/c.

For Example, the Purchase price of the product is Rs 1,500/- but Retailer offers us only for Rs. 1,350/- after deducting 10% discount. here the amount of discount received is Rs 150/-.

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**Now, We will discuss the Journal Entry for Discount Received as below:**

**1. Discount received and the net amount paid or total amount payable is given:**

#### Example No. 1:

05/02/2018 Amount **paid to **Mr A of Rs **900/-** and he allowed a discount of Rs 100/-.

**Or**

#### Example No. 2:

05/02/2018 The amount **payable **to Mr A of Rs **1,000/-** and he allowed a discount of Rs 100/-.

Both Journal Entry for Discount Received are same and treated as the following:

**2. The Percentage of discount received and the total amount payable is given:**

#### Example No. 3:

05/02/2018 The amount **payable **to Mr A of Rs **1,000/-** and he allowed a discount @ 10%.

In That transaction, you have to calculate discount first as the following:

1000*10/100 = 100/-

**Journal Entry remains same as above.**

**3. The percentage of discount received and the total amount paid is given:**

#### Example No. 4:

05/02/2018 Amount **paid to **Mr A of Rs **900/-** and he allowed a discount @ 10%.

In That transaction, you also have to calculate the amount discount first as the following:

if the amount paid is given then we have to use the following formula to calculate the amount of discount same as we calculate discount allowed in the previous topic.

**Percentage of Discount/100 – Percentage Rate of Discount** (we will show you it in Image below)

Discount Received calculation**Journal Entry remains same as above.**