Question

Vaughn Company made a purchase of merchandise on credit from Ivanhoe Company on August 8, for $8900, terms 2/10, n/30. On August 17, Vaughn makes the appropriate payment to Ivanhoe. The entry on August 17 for Vaughn Company is: Accounts Payable 8900 Purchase Returns and Allowances 178 Cash 8722 Accounts Payable 8900 Cash 8900 Accounts Payable 8722 Cash 8722 Accounts Payable 8900 Inventory 178 Cash 8722

Answer 1

Accounts Payable 8900 Inventory 178 Cash 8722

Step-by-step explanation:

The journal entry is shown below:

Accounts payable $8,900

To inventory $178 ($8,900 × 2%)

To Cash $8,722

(Being the payment is recorded)

Here the account payable is debited as it decreased the liabilities and the inventory and cash is credited as it also decreased the assets

Therefore the last option is correct