On July 15, 2011, the Nixon Car Company purchased 1,000 tires from the Harwell C

Question

On July 15, 2011, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the gross method of accounting for purchase discounts.

Required:
(1)

Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2011. (Omit the "$" sign in your response.)

Date General Journal
July 15, 2011
Debit:
Credit:


July 23, 2011
Debit:
Credit:
Credit:


(2)

Prepare the journal entry to record the payment on August 15, 2011. (Omit the "$" sign in you response.)

Date General Journal
Aug. 15, 2011
Debit:
Credit:

Explanation / Answer

Hi, Journal Entries - Part 1 Date General Journal July 15, 2011 Debit: Purchases/Inventory 50000 Credit: Harwell Company 50000 July 23, 2011 Debit:Harwell Company 50000 Credit:Cash/Bank 49000 Credit: Discount Received 1000 Journal Entry - Part 2 Debit:Harwell Company 50000 Credit:Cash/Bank 50000 Thanks Aman

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