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In: Accounting

On December 28, 2018, Videotech Corporation (VTC) purchased 10 units of a new satellite uplink system...

On December 28, 2018, Videotech Corporation (VTC) purchased 10 units of a new satellite uplink system from Tristar Communications for $29,000 each. The terms of each sale were 2/10, n/30. VTC uses the net method to account for purchase discounts and a perpetual inventory system. VTC paid the net-of-discount amount on January 6, 2019.

Prepare the necessary journal entries assuming that VTC uses the net method to account for purchase discounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Solutions

Expert Solution

Date General Journal Debit Credit
December 28, 2018 Inventory ($29,000 ×10 = $290,000 ; $290,000 - 2% = $284,200 $284,200
Account payable $284,200
(Being purchse of new satellite uplink system recorded)
January 6 ,2019 Account payable $284,200
Cash $284,200
(Being payment made for the purchase recorded)

ekkarill92 answered 2 years ago
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