Answer:
The journal entry that Jepson makes on September 18 is:
Account Payable ; Vander Company $8,600 (debit)
Discount Received $172(credit)
Cash $8,428 (credit)
Explanation:
When Vander Company sales to Jepson Company, the following entries will be recorded :
Cost of Sales $5,400 (debit)
Account Receivable : Jepson Company $8,600 (debit)
Merchandise $5,400 (credit)
Sales Revenue $8,600 (credit)
When Jepson pays the invoice on September 18, they settle their account within the discount period and is granted a Cash discount of 2%.
<u>The Entry to be made is as follows in </u><u>Vander Company</u><u> :</u>
Cash $8,428 (debit)
Discount Allowed $172 (debit)
Account Receivable : Jepson Company $8,600 (credit)
<u>The Entry to be made is as follows in </u><u>Jepson Company</u><u> :</u>
Account Payable ; Vander Company $8,600 (debit)
Discount Received $172(credit)
Cash $8,428 (credit)
Conclusion :
The journal entry that Jepson makes on September 18 is:
Account Payable ; Vander Company $8,600 (debit)
Discount Received $172(credit)
Cash $8,428 (credit)
