The journal entry to record the purchase on account of $900 of merchandise with freight of $65 prepaid and added to the invoice is:

Question

Quizplus · Accepted Answer

The debit should be made to Purchases for the cost of the merchandise, and to Freight In for the prepaid freight. The total amount of the purchase, including the prepaid freight, should be credited to Accounts Payable. Therefore, the correct journal entry is to debit Purchases for $900, debit Freight In for $65, and credit Accounts Payable for $965. Option A is incorrect because it does not account for the prepaid freight. Option B is incorrect because it would require debiting Accounts Payable twice, once for the merchandise and once for the prepaid freight. Option D is not relevant to the purchase transaction described.

The Journal Entry to Record the Purchase on Account of $900