Goods costing $1,900 are purchased on account on July 15 with credit terms of 2/10, n/30. On July 18, the purchaser receives a $300 credit from the supplier for damaged goods. Give the journal entry on July 24 to record payment of the balance due within the discount period

The journal entry is shown below:

Accounts payable A/c Dr $1,600

To Cash A/c $1,568

To Merchandise Inventory A/c $32

(Being due amount is paid and the remaining balance is credited to the cash account)

The computation is shown below:

For account payable

= Purchase value of goods - credit from the supplier for damaged goods

= $1,900 - $300

= $1,600

For discount

= $1,600 * 2%

= $32

We assume the perpetual inventory method is followed