Respuesta :
Answer:
The journal entries necessary for the transactions are :
Dr Accounts payable $750
Cr Purchase discount $15
Cr Cash $735
Explanation:
The payment of $735 in settlement of payable account of $750 means that cash account has reduced by $735, a credit entry as well as an increase income discount on purchases of $15.
However, the payable accounts that has an invoice value of $750 is also reducing by $750 the value of the debt owed to the supplier,hence a debit is required to reverse the earlier recording of credit
Explanation:
Given:
Cash payment = $735
Discount = 2%
2% of $750
= $15
Invoice = $750
Invoice of $750 is the initial cost of Sam's sharpening services with the discount of 2% of the invoice cost is $735 cash payment made by Terry's Tree Removal.
Journal entry for Terry's Tree Removal:
Debit:
Accounts Payable/Sam's of sharpening Service = $750
Credit:
Purchases Discount = $15
Cash payment = $735
