Question

In: Finance

A company that uses the gross method of recording purchases and a perpetual inventory system made...

A company that uses the gross method of recording purchases and a perpetual inventory system made a purchase of $2,200 with terms of 2/10, n/30. The entry to record the purchase would be:

Debit Merchandise Inventory $2,156; credit Accounts Payable $2,156. Debit Merchandise Inventory $2,200; credit Accounts Payable $2,200. Debit Merchandise Inventory $2,156; credit Cash for $2,156. Debit Merchandise Inventory $2,156; debit Discounts Lost $44; credit Accounts Payable $2,200. Debit Accounts Payable $2,200; credit Discounts Lost $44; credit Cash $2,156.

Solutions

Expert Solution

Answer is. Debit Merchandise inventory $2200; Credit Accounts payable $ 2200.
Explanation:
Journal entry for purchase:
Accounts title and explanations Debit $ Credit $
Merchandise inventory 2200
    Accounts payable 2200

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