In: Accounting
On July 15, 2018, the Nixon Car Company purchased 2,300 tires
from the Harwell Company for $35 each. The terms of the sale were
4/10, n/30. Nixon uses a periodic inventory system and the
net method of accounting for purchase discounts.
Required:
1. Prepare the journal entries to record the
purchase on July 15 and payment on July 23, 2018.
2. Prepare the journal entry to record the payment
on August 15, 2018.
3. If Nixon instead uses a perpetual inventory
system, explain any changes to the journal entries created in
requirements 1 and 2.