On July 1,B.Darin Company sold merchandise costing $4,500 to S.Dee Company for $6,000,terms 2/10,n/30.Both companies use the perpetual inventory system.S.Dee Company pays the invoice on July 8 and takes the appropriate discount.What is the journal entry that S.Dee Company will make on July 8?

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Quizplus · Accepted Answer

S.Dee Company will make the journal entry to record the payment on July 8. The entry will debit Accounts Payable for the amount of the invoice less the discount ($5,880 = $6,000 - ($6,000 x 2%)), credit Cash for the amount paid ($5,764.40 = $5,880 - $115.60 discount taken), and credit Purchase Discounts for the amount of the discount taken ($115.60 = $6,000 x 2%). Therefore, the correct option is C.