A company purchased $1,800 of merchandise on July 5 with terms 2/10,n/30.On July 7,it returned $200 worth of merchandise.On July 28,it paid the full amount due.The correct journal entry to record the purchase on July 5 is:

Question

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The purchase of merchandise on credit is recorded by debiting Merchandise Inventory and crediting Accounts Payable for the same amount, which is $1,800 in this case. Option A is incorrect because it does not account for the credit term of 2/10, n/30. Option C is incorrect because it records a sales return, which did not occur at the time of purchase. Option D is incorrect because it reverses the debit and credit accounts. Option E is incorrect because it records a purchase return, which also did not occur at the time of purchase. Therefore, option B is the best choice as it properly records the purchase of merchandise on credit with the correct accounts.

A Company Purchased $1,800 of Merchandise on July 5 with Terms