An October 15 journal entry with the following information was included in the accounting records of Jentzen Corp.: accounts payable,$4,000; merchandise inventory,$40; cash,$3,960.Based on this information,which of the following is most likely?

Question

Quizplus · Accepted Answer

The journal entry indicates that Jentzen Corp. paid $3,960 against its accounts payable of $4,000, which suggests they took advantage of a 1% purchase discount ($4,000 - $40 = $3,960), and the merchandise inventory reduction indicates the payment was for inventory purchased on credit.

An October 15 Journal Entry with the Following Information Was