Answer:
$4,850
Explanation:
If the total invoice price is $5,000 and the company pays within the discount period, then the net price = $5,000 x (1 - 3%) = $4,850
the journal entries should be as follows:
Day 1, merchandise is purchased with 3/10, n/30 terms:
Dr Merchandise inventory 5,000
Cr Accounts payable 5,000
Day 10, the invoice is paid:
Dr Accounts payable 5,000
Cr Cash 4,850
Cr Purchase discounts 150
