Question

A buyer uses a periodic inventory system, and it purchases $4,000 of merchandise on credit terms of 2/10, n/30 on December 5. On December 15, it pays the invoice in full. Prepare the buyer's necessary journal entry for payment by selecting the account names from the drop-down menus and entering dollar amounts in the Debit and Credit columns.

Answer 1

Step-by-step explanation:

Purchase discount = $4000 * 2% = $80

Date Accounts title Debit Credit

Dec-15 Accounts Payable $4,000

Purchase Discounts $80

Cash $3,920

(To record payment within discount term of 10 days)