Satoor,Inc. Satoor,Inc. ,which uses a periodic inventory system,purchased merchandise from Taye Company on July 7,2013,for $15,000.The credit terms were 1/10,n/30.The goods were shipped FOB shipping point on July 7,2013.Satoor,Inc.received the merchandise on July 10 and paid the amount due on July 15.
-Refer to the information provided for Satoor,Inc.When the buyer records the payment on July 15th,its journal entry will include:

Question

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When Satoor,Inc. pays the amount due on July 15, it decreases its Accounts Payable by $15,000. Therefore, the journal entry will include a debit to Accounts Payable for $15,000 and a credit to Cash for $15,000. The options A and B are incorrect because Purchases and Inventory are not affected by the payment since Satoor, Inc. purchased the goods on credit and already recorded them as purchases and inventory at the time of purchase. Option C is incorrect because it suggests that Satoor, Inc. paid $15,000 in cash at the time of purchase, which is not the case because the credit terms were 1/10, n/30.