Question

On September 12, Vander Company sold merchandise in the amount of $9,000 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $5,600. Jepson uses the periodic inventory system and the gross method of accounting for purchases. Jepson pays the invoice on September 18 and takes the appropriate discount. The journal entry that Jepson makes on September 18 is:

Answer 1

Answer and Explanation:

The journal entry is shown below;

Cash  $8,820

Purchases discounts  (2% of $9,000) $180

    To Accounts payable $9,000

(Being cash received is recorded)

here cash is debited as it increased the assets, discount is debited and credited the account payable as it also increased the liability