Question

Prepare journal entries to record each of the following transactions. The company records purchases using the...

Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system.

Aug. 1 Purchased merchandise with an invoice price of $63,000 and credit terms of 3/10, n/30.
Aug. 11 Paid supplier the amount owed from the August 1 purchase.

Journal entry worksheet

  • Purchased merchandise with an invoice price of $63,000 and credit terms of 3/10, n/30.

Note: Enter debits before credits.
Date General Journal Debit Credit
Aug 01
Business   Accounting   
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Homework Answers

Answer #1

Term 3/10 means, if the company paid cash within 10 days, they will get a cash discount of 3%

Date General Journal Debit Credit
Aug-01 Merchandise inventory $   63,000
Accounts payable $   63,000
Aug-11 Accounts payable $   63,000
Merchandise inventory ($63,000*3%) $     1,890
Cash $   61,110

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