What would the transaction be for. .

Collected a large account receivable in the amount of $40,000.
Terms on the receivable were N/30 ?



Purchased merchandise on account from Han Trading for $15,000.
Terms 2/10 , N/30 ?



I know 2/10 means 2% in 10 days and N/30 means paid in full in 30 days, right ?

Quote:

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Originally Posted by KrystalLea

What would the transaction be for . .

Collected a large account receivable in the amount of $40,000.
Terms on the receivable were N/30 ?



Purchased merchandise on account from Han Trading for $15,000.
Terms 2/10 , N/30 ?



I know 2/10 means 2% in 10 days and N/30 means paid in full in 30 days, right ?

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For the first entry

Dr. Cash... 40,000
Cr. Accounts Receivable... 40,000

Second entry

Dr. Merchandise Inventory... 15,000
Cr. Accounts Payable... 15,000

If you do the payment 2/10

Dr. Accounts Payable... 15,000
Cr. Merchandise Inventory... 300
Cr. Cash... 14,700

If paid n/30

Dr. Acounts Payable... 15,000
Cr. Cash... 15,000

Gave me the information needed !