Question

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. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Answer:

The answer is

July 24

Dr: accounts payable $1800

Cr: Cash $1764

Cr:. Discount receceived $36

Explanation:

The goods were Purchased on July 15 at $2,000

There will be discount of 2percent if he paid back within 10days and the number of days in the month 30 (2/10, n/30).

The credit memo of $200 reduces the accounts payable by $200(due to the damaged goods). The new accounts payable for the goods is now $1,800($2,000 - $200).

So the discount receceived will be $36(2percent of $1,800)

On the 24, the payment was done(meaning the discount of 2percent will be utilized.)

So on this day, the journal entry will be:

July 24

Dr: accounts payable $1800

Cr: Cash $1764

Cr:. Discount receceived $36