A company using the perpetual inventory system purchased inventory worth $550,000 on account with credit terms of 2/15,n/45.Defective inventory of $60,000 was returned 3 days later,and the accounts were appropriately adjusted.If the company paid the invoice 20 days later,the journal entry to record the payment would be ________.
A) $550,000 debit to Accounts Payable and $550,000 credit to Cash
B) $490,000 debit to Accounts Payable and $490,000 credit to Cash
C) $550,000 debit to Accounts Payable, $540,200 credit to Cash, and $9,800 credit to Merchandise Inventory
D) $499,800 debit to Accounts Payable, $9,800 credit to Merchandise Inventory, and $490,000 credit to Cash

Question

Quizplus · Accepted Answer

The company returned $60,000 of defective inventory, reducing the payable to $490,000. Since the payment was made after the discount period, no discount is applied, so the full amount of $490,000 is paid in cash.

A Company Using the Perpetual Inventory System Purchased Inventory Worth