Question

On July 15, a company purchases on account goods costing $1,900, with credit terms of 2/10, n/30. On July 18, the company receives a $400 credit memo from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discount period assuming a periodic inventory system. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Solution

Date	General Journal	Debit	Credit
Jul-24	Accounts Payable	$        1,500.00
	Sales discount and allowances		$        30.00
	Cash		$ 1,470.00
	(To record payment on account)

.

Original invoice amount	$ 1,900.00
Less: Credit received for damaged goods	$     400.00
Gross amount payable	$ 1,500.00
Less: Discount availed (1500 x 2%)	$        30.00
Net payable within discount period	$ 1,470.00