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JULY 1 2018, PURCHASE OF MERCHANDISE ON ACCOUNT $20,000, TERMS 1/10, N/30 JULY 8, 2018, PAYMENT...

  1. JULY 1 2018, PURCHASE OF MERCHANDISE ON ACCOUNT $20,000, TERMS 1/10, N/30
  2. JULY 8, 2018, PAYMENT OF ABOVE PAYABLE
  3. AUGUST 1, 2018 SOLD MERCHANDISE ON ACCOUNT FOR $35,000 WITH A COST OF 20,000 USING THE PERPETUAL INVENTORY SYSTEM, WITH THE TERMS 2/10, N/30
  4. AUGUST 7, 2018 RECEIVED PAYMENT FOR ABOVE
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Answer #1

Journal entry

Date account and explanation Debit Credit
July 1 Merchandise inventory 20000
Account payable 20000
(To record purchase)
July 8 Account payable 20000
Cash (20000*99%) 19800
Merchandise inventory 200
(To record payment)
Aug 1 Account receivable 35000
Sales revenue 35000
(To record sales)
Cost of goods sold 20000
Merchandise inventory 20000
(To record cost of goods sold)
Aug 7 Cash (35000*98%) 34300
Sales discount 700
Account receivable 35000
(To record collection)
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