Answer:
Explanation:
The journal entries are shown below:
On July 15:
Purchase A/c Dr $89,180
To Accounts payable $89,180
(Being purchase of goods are made on credit with discount)
The computation of the purchase of tires after applying the discount is shown below:
= Number of tires × price per tire - discount rate
= 2,600 tires × $35 - 2%
= $91,000 - $1,820
= $89,180
On July 23:
Account payable A/c Dr $89,180
To Cash A/c $89,180
(Being payment is made)
On August 15:
Account payable A/c Dr $89,180
Interest expense A/c Dr $1,820
To Cash A/c $91,000
(Being payment is made on late interval)
