Question

Prepare journal entries to record each of the following transactions. The company records purchases using the gross method and a perpetual inventory system. Aug. 1 Purchased merchandise with an invoice price of $108,000 and credit terms of 3/10, n/30. Aug. 11 Paid supplier the amount owed from the August 1 purchase.

Answer 1

Answer:

Supplier or creditor ac Dr .... to Cash ac Cr

Explanation:

• Company records purchases using the gross method

Purchase ac Dr .. to Creditor ac Cr      

{ Asset / Expense increase debit , liability increase credit }

• Paid supplier the amount owed from the August 1 purchase.

Supplier or creditor ac Dr .... to Cash ac Cr

{ Liability decrease debit , Asset decrease credit }