On June 3,Addison Company purchased merchandise worth $1,600 on credit,terms 2/10,n/30.The account was paid on June 10.What is the required journal entry to record the payment under the periodic inventory system?

Question

Quizplus · Accepted Answer

To record the payment under the periodic inventory system, we need to make the following journal entry:

Debit Accounts Payable: $1,600 (to reduce the liability)
Credit Cash: $1,568 (computed as $1,600 - (($1,600 * 2%) = $32))

Option A is incorrect as it records the purchase transaction rather than the payment transaction.

Option C is incorrect as it records the purchase return transaction.

Option D is incorrect as it records the purchase discount transaction which is not applicable in this case as the company did not take advantage of the discount offer.

On June 3,Addison Company Purchased Merchandise Worth $1,600 on Credit,terms