Goods costing $2,000 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, a $200 credit memo is received from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discount period using a perpetual inventory system.

Question

Kaylin Solomon

Business

28 May, 19:14

Goods costing $2,000 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, a $200 credit memo is received from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discount period using a perpetual inventory system.

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Jordyn Short · Answer 1

The journal entry is as follows

Account payable A/c Dr $1,800

To Merchandise Inventory A/c $36

To Cash A/c $1,764

(Being the amount due is paid)

The computation is shown below:

For Account payable

= $2,000 - $200

= $1,800

For Merchandise inventory

= ($2,000 - $200) * 2%

= $36

And, the remaining balance is credited to the cash account