Question

Leo Corp has received an invoice for​ $6,500 with terms of​ 3/15, n/45 and uses the net method to record purchases. If Leo pays the invoice on the seventeenth​ day, the Cash account will​ be:

A. debited for $6,305
B. credited for $6,500
C. credited for $195
D. credited for $6,305

Answer 1

The correct option is B

Step-by-step explanation:

An amount of $6500 has been received by the Leo Corp. As given in the question that the payment is done on 17th day that is, after the discount period of (15 days), it has to paid full cash on that day. So amount paid will be $6500 on that day. Hence Cash Account will be credited with an amount of $6500.

Therefore, the correct option from the given options is B) that is Credit for $6,500.