Laird Corporation bought $2,000 of merchandise from Woods Corporation,terms 2/10,n/30.The journal entry to record the payment under the net approach method after the discount period would be to:

Question

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Under the net method, purchases are initially recorded at net of discount. If the payment is made after the discount period, the discount not taken is recorded as an expense (Discounts Lost). Therefore, the entry includes debiting Vouchers Payable for the net amount ($1,960), debiting Discounts Lost for the discount not taken ($40), and crediting Cash for the total payment ($2,000).

Laird Corporation Bought $2,000 of Merchandise from Woods Corporation,terms 2/10,n/30