Question

Recording purchases made for cash and on account. LO 8-1 Lewis Corporation engaged in the following transactions during June. DATE TRANSACTIONS 2019 June 4 Purchased merchandise on account from Salinas Company; Invoice 100 for $1,065; terms n/30. 15 Recorded purchases for cash, $1,550. 30 Paid amount due to Salinas Company for the purchase on June 4. Record these transactions in a general journal.

Answer 1

Answer:

(A) June 4

Inventory debit 1,065

Accounts Payable credit 1,065

(B) June 15

Inventory debit 1,550

Cash credit 1,550

(C) June 30

Accounts Payable debit 1,065

Cash credit 1,065

Explanation:

(A) there is no information or suggestion that Lweis will take the discount, we post as it was nominal, if later on it is paid within the discount period, we will recognize it. No discount is recorded

(B) Simple: increase the inventory receive and decrease cash by the amount paid.

(C) We settle the account payable for the nominal of the purchase.

It wasn't within the discount period. So no discount is granted.