Question

Make a journal entry. July 10 purchased merchandise from Rupert Co. for $14, 200 under credit terms of 1/ 10, n/45, FOB shipping point, invoice dated July 10.

Answer 1

Journal Entry in case of perpetual inventory system
DATE	Accounts Name	Debit	Credit
July. 10	Inventory	14200
	Accounts Payable		14200
	(To record purchase)
Journal Entry in case of periodic inventory system
DATE	Accounts Name	Debit	Credit
July. 10	Purchase	14200
	Accounts Payable		14200
	(To record purchase)
Term 1/10, n/45 means that normal credit period is 45 days, however 1 percent cash discount will be given if payment made within 10 days.