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20 October, 23:32

Purchases were made on account on August 5th in the amount of $100,000 with terms of 1/10, n/30. The bill was paid on August 14th. In a perpetual inventory system the journal entry to record the payment would include

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  1. 21 October, 00:43
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    Dr. Cr.

    Account Payable $100,000

    Cash Discount Received $1,000

    Cash $99,000

    Explanation:

    Purchase Amount = $100,000

    Terms of 1/10, n/30 means that there is 1% discount available on the payment of purchases made within 10 days after purchase. The payment has bee made within the discount period so payment are entitled to claim the discount.

    Discount = $100,00 x 1% = $1,000
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Home » Business » Purchases were made on account on August 5th in the amount of $100,000 with terms of 1/10, n/30. The bill was paid on August 14th. In a perpetual inventory system the journal entry to record the payment would include
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