Emerald Co.uses a perpetual inventory system and records purchases of merchandise at net cost.The company recently purchased 200 compact discs at an invoice price of $6,000 and terms of 2/10,n/30.Half of these discs had been mislabeled and were returned immediately to the supplier.The journal entry to record payment of this invoice after the discount period has expired will include a:
A)Debit to Inventory for $3,000.
B)Credit to Cash for $3,000.
C)Debit to an expense account for $60.
D)Credit to Cash for $2,940.

Question

Quizplus · Accepted Answer

Since the company returned half of the compact discs, the amount owed would be half of the original $6,000 invoice, which is $3,000. Since the payment is made after the discount period, no discount applies, and the full amount of $3,000 is paid. Therefore, the journal entry to record the payment would include a credit to Cash for $3,000, reflecting the cash outflow to settle the invoice.