Question

On May 5, Ivan Brick Company orders 1,000 pallets of red bricks at a cost of $245 per pallet from Yang Grew Foundries on an open account. The shipping terms are FOB destination. Ivan Brick receives the bricks on May 12. Ivan Brick uses the perpetual inventory method.

Required: Prepare the journal entry to record the receipt of the bricks.

Answer 1

The journal entry to record the receipt of the bricks is a debit to Inventory and a credit to Accounts Payable.

Step-by-step explanation:

The journal entry to record the receipt of the bricks would be:

Inventory 245,000
Accounts Payable 245,000

This entry debits the Inventory account for the cost of the bricks received and credits the Accounts Payable account to reflect the liability to Yang Grew Foundries.

Keywords: journal entry, record, receipt, bricks, Inventory, Accounts Payable