On May 1, Garcia Corporation bought $11,000 of merchandise from Morris Corporation, terms 4/10, n/30. Garcia paid the invoice on May 6. The company uses the periodic and voucher system. The journal entry to record the payment under the net method would be to:

Question

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Under the net method, the purchase is initially recorded with the discount deducted, assuming the discount will be taken. Therefore, if the payment is made within the discount period, the payment amount is the invoice amount minus the discount ($11,000 - $440 = $10,560). The journal entry is to debit Vouchers Payable for $10,560 and credit Cash for $10,560, reflecting the actual payment amount.

On May 1, Garcia Corporation Bought $11,000 of Merchandise from Morris