Question

​Glasgow, Inc. uses the periodic inventory system. On February​ 1, the corporation purchased inventory on account for $11,000. The terms were 3​/10, ​n/30. On February​ 2, it returned damaged goods worth $500 to the supplier and was granted an allowance. Give the journal entry for the payment if the invoice is paid after the discount period.​ (Round your answers to the nearest​ dollar.)

Answer 1

The journal entry for the payment if the invoice is paid after the discount period would include debits to Accounts Payable and Purchase Discounts, and a credit to Cash.

Step-by-step explanation:

The journal entry for the payment if the invoice is paid after the discount period would be:

Accounts Payable 11,000
Cash 10,670
Purchase Discounts 330

The journal entry debits Accounts Payable to reduce the liability and credits Cash for the amount actually paid. The Purchase Discounts account is credited for the amount of the discount forfeited.