A company that uses the perpetual inventory system purchases inventory for $60,000 on credit,with terms of 3/10,n/30.Which of the following is the journal entry to record the payment made within 3 days?
A)a debit to Accounts payable for $60,000,a credit to Inventory for $1800 and a credit to Cash for $58,200
B)a debit to Inventory for $1800,a debit to Accounts payable for $60,000 and a credit to Cash for $61,800
C)a debit to Accounts payable for $58,200,a debit to Inventory for $1800 and a credit to Cash for $60,000
D)a debit to Accounts payable for $61,800 ,a credit to Cash for $60,000 and a debit to Inventory for $1800

Question

Quizplus · Accepted Answer

The company receives a 3% discount for paying within 10 days, so the discount is $1,800 ($60,000 * 3%). The journal entry debits Accounts Payable for the full amount of $60,000, credits Inventory for the discount of $1,800, and credits Cash for the net amount paid, $58,200.

A Company That Uses the Perpetual Inventory System Purchases Inventory