please answer part C com/placformmodiquafatompt php attsmpt- 1699446pag0-6 Menu

Question

please answer part C

com/placformmodiquafatompt php attsmpt- 1699446pag0-6 Menu Recording Cash Discounts Schrand Corporation purchases materials from a supplier that offers credit terms of 2/15, n60. purchased $12500 of merchandise inventory from that supplier on January 20, 2016 Required a. Assume that Schrand Corporation paid the irwoice on February 15, 2016. Prepare journal entries to record the purchase of this inventory and the cash method. payrment to the supplier using the net-of discount General Jaurnel Deseription 12,250 ccounta payable 12250 12250 250 012Sco b. Set up the necessary T-accounts and post the journal entries from question a to the accounts Cash IA) Accounts Peyable ) 1/20 10 8 7 5 6

Explanation / Answer

Solution:

c. Cost of a lost discount as annual percentage rate = [($12,500- $12,250*)/$12,250] x [365/(60-15)]

Cost of a lost discount as annual percentage rate = 16.55%

*$12,250 = $12,500 x 0.98

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