Morgan, Inc. uses a perpetual inventory system and the net method of recording purchases. On May 12, a merchandise purchase of $15,000 was made on credit, 2/10, n/30. Payment was made on May 20. The journal entry to record the payment is:

Question

Quizplus · Accepted Answer

The journal entry to record the payment for a merchandise purchase using the net method and perpetual inventory system is as follows:

Debit Accounts Payable for the original amount of purchase - $15,000
Debit Inventory for the amount of discount - $300 (2% of $15,000)
Credit Cash for the amount paid - $14,700 ($15,000 - $300)

Therefore, the correct journal entry is:
Debit Accounts Payable - $15,000
Debit Inventory - $300
Credit Cash - $14,700