Question

Purchase goods costing Rs. 450000 from khanal Goods Supplier for which partial payment of Rs.76000(net of discount) was made at the time of purchase after adjustment of 5% discount. What is journal entries?​

Answer 1

The journal entries for the transaction would involve debiting purchases and accounts payable, and crediting accounts payable, cash, discount allowed, and discount received.

Step-by-step explanation:

The journal entries for the transaction would be as follows:

1. Debit: Purchases (cost of goods), Rs. 450,000
   Credit: Accounts Payable (Khanal Goods Supplier), Rs. 450,000
2. Debit: Accounts Payable (Khanal Goods Supplier), Rs. 37,000 [($76,000 - $3,800) = $37,000]
   Debit: Discount Allowed (Cost of discount), Rs. 3,800 [($76,000 x 5%) = $3,800]
   Credit: Cash (Partial payment made), Rs. 76,000
   Credit: Discount Received (Discount received), Rs. 3,800

The first journal entry records the purchase of goods costing Rs. 450,000 from Khanal Goods Supplier, increasing purchases and accounts payable. The second journal entry reflects the partial payment made, reducing the accounts payable and recognizing the discount allowed and discount received.