Question

Waterway Company made a purchase of merchandise on credit from Carla Vista Company on August 8, for $9200, terms 3/10, n/30. On August 17, Waterway makes the appropriate payment to Carla Vista. The entry on August 17 for Waterway Company is:

Answer 1

Dr Accounts Payable 9,200

Cr Inventory 276

Cr Cash 8,924

Step-by-step explanation:

Preparation of the Journal entry on August 17 for Waterway Company

Since we were told that the company made a credit purchase of the merchandise on Aug 8 for the amount of $9,200 with a terms of 3/10 from Carla Vista Company this means that the transaction will be recorded as:

Dr Accounts Payable 9,200

Cr Inventory 276

(3%×9,200)

Cr Cash 8,924

(97%*9,200)