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Financial & Managerial Accounting
Found in: Page 207
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system.

Sep. 15 Purchased merchandise with an invoice price of $35,000 and credit terms of 2∕5, n∕15.

29 Paid supplier the amount owed on the September 15 purchase.

Both sides of the journal total to $70,000.

See the step by step solution

Step by Step Solution

Step 1: Definition of Invoice

A document issued by the seller to the buyer in a commercial transaction reflecting the goods purchased, date of transaction, and transaction amount are known as an invoice.

Step 2: Journal Entries

Date

Accounts and Explanation

Debit $

Credit $

15 Sep

Merchandise inventory

$35,000

Account payable

$35,000

29 Sep

Cash

35,000

Account payable

35,000

$70,000

$70,000

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