Answer:
Dr. Accounts Payable.........(1,800 - 200)....$1,600
Cr. Cash..........................................................................$1,600
Explanation:
Since the company uses the net method of recording purchases and a perpetual inventory system and purchases $1,800 of merchandise on july 5 with terms 2/10, n/30.
After the returns on July 7, of $200 worth of merchandise.
The correct journal entry to record the payment on July 28 is:
1. The Journal entries will be for the purchases amount less the returns of inventory
2. The discount of 2% has elapsed since the company did not pay within 10 days.
JOURNAL ENTRY
Dr. Accounts Payable.........(1,800 - 200)....$1,600
Cr. Cash..........................................................................$1,600
Being settlement of purchases of $1800 on account less purchases returns of $200
