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25 May, 22:16

You purchase 8 pallets of patio stone on account at a cost of $200 per pallet with a 20% contractor discount. You will pay in three installments. How much will the entry for the first installment payment be?

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  1. 25 May, 22:51
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    The journal entries should be as follows:

    Day 1, you purchase the materials (8 pallets x $200 x 80%)

    Dr Materials Inventory account 1,280 Cr Accounts Payable account 1,280

    Day 31, you pay the first installment ( = $1,280 / 3)

    Dr Accounts Payable account 426.67 Cr Cash account 426.67

    Day 61, you pay the second installment ( = $853.33 - $426.66)

    Dr Accounts Payable account 426.67 Cr Cash account 426.67

    Day 91, you pay the third installment

    Dr Accounts Payable account 426.66 Cr Cash account 426.66
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