Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period?
a. Accounts Payable—Emma Co., debit $15,750; Inventory, debit $300; Cash, credit $16,050
b.Accounts Payable—Emma Co., debit $15,000; Freight In, debit $750; Cash, credit $15,750
c. Accounts Payable—Emma Co., debit $15,450; Cash, credit $15,450
d. Accounts Payable—Emma Co., debit $15,000; Cash, credit $15,000

Question

contestada

Respuesta :

andromache andromache · Answer 1 · 2019-11-12T12:33:48+01:00

Answer:

c. Accounts Payable—Emma Co., debit $15,450; Cash, credit $15,450

Explanation:

The journal entry is shown below:

Accounts payable - Emma Co. A/c Dr $15,450

To Cash A/c $15,450

(Being balance owed is paid)

The computation of amount paid is shown below:

= Purchase value of merchandise + shipping cost - discount

= $15,000 + $750 - $300

= $15,450

The discount is computed below:

= Purchase value of merchandise × discount rate

= $15,000 × 2%

= $300