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accounting hw please help
Asked May 4, 2012, 04:56 AM
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2 Answers do the journal entries : On 2 March, L. Hunt Company purchased $900 000 of inventory from M. Streisand Company, terms 2/10, n/30. On 12 March L. Hunt Company paid the balance due to M. Streisand Company. |
2 Answers
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| Debit Inventory for the amount of purchase Credit Accounts Payable for the amount of purchase Since the payment is within the 10 days for the discount you have to calculate the amount of discount. Take the purchase price times the amount of the discount percentage. So $900,000 times 2% equals your discount. Your journal entry is: Debit Accounts Payable for the amount of purchase Credit Cash for the amount of payment ($900,000 minus the amount of discount) Debit Purchase discount for the amount of the disocunt | ||||
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