A company using the perpetual inventory system purchased inventory worth $510,000 on credit with terms of credit being 3/15,n/45.Defective inventory of $80,000 was returned 2 days later and the accounts were appropriately adjusted.If the company paid the invoice 20 days later,the journal entry to record the payment would be:
A)$430,000 debit to Accounts payable and $430,000 credit to Cash.
B)$510,000 debit to Accounts payable,$497,100 credit to Cash and $12,900 credit to Inventory.
C)$442,900 debit to Accounts payable,$12,900 credit to Inventory and $430,000 credit to Cash.
D)$510,000 debit to Accounts payable and $510,000 credit to Cash.

Question

Quizplus · Accepted Answer

The company returned $80,000 of defective inventory, reducing the payable to $430,000. Since the payment was made after the discount period (20 days), no discount is applied, so the full amount of $430,000 is paid.

A Company Using the Perpetual Inventory System Purchased Inventory Worth