Question

Meteor Co. purchased merchandise on March 4, 2021, at a price of $30,000, subject to credit terms of 2/10, n/30. Meteor uses the net method for recording purchases and uses a periodic inventory system.

Required:

1. Prepare the journal entry to record the purchase.

2. & 3. Prepare the journal entries to record the appropriate payment if the entire invoice is paid on March 11, 2021 and April 2, 2021.

Answer 1

Answer-

1. journal entry to record the purchase
Date	Account Titles /Explanations	Debit	Credit
04 March 2021	Purchases	$    29,400
	Accounts Payable		$    29,400
	(Purchases net of discount)
2
a. journal entry to record the appropriate payment if the entire invoice is paid on March 11, 2021
Date	Account Titles /Explanations	Debit	Credit
11 March 2021	Accounts Payable	$    29,400
	Cash		$    29,400
	(for payment within the discount period)
b.journal entry to record the appropriate payment if the entire invoice is paid on April 2, 2021
Date	Account Titles /Explanations	Debit	Credit
02-04-2021	Accounts Payable	$    29,400
	Purchase discount lost	$         600
	Cash		$    30,000
	(for payment after the discount period treating discount loss as expense)

If you are satisfied plz give a like