Help please Help please A company purchased $2,400 of merchandise on July 5 with
ID: 2561310 • Letter: H
Question
Help pleaseHelp please
A company purchased $2,400 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $500 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is 011629 Multiple Choice Debit Merchandise Inventory $1,900, credit Cash $1,900. Debit Cash $1,900, credit Accounts Payable $1,900 Debit Accounts Payable $1,900, credit Merchandise Inventory $57, credit Cash $1,843. Debit Accounts Payable S2.400, credt Cash $2,400
Explanation / Answer
Answer: Debit Accounts Payable $1,900; credit Merchandise inventory $57; credit Cash $1,843.
Accounts payable is debited for $1,900 ($2,400 - $500), the merchandise inventory is reduced by the amount of discount of $57 (3% x $1,900) and cash is credited for the net amount paid $1,843 ($1,900 - $57).
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