Question

On September 12, Ryan Company sold merchandise in the amount of $6,000 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,100. Johnson uses the periodic inventory system and the net method of accounting for purchases. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Johnson makes on September 18 is: Multiple Choice Accounts payable 4,100 Merchandise inventory 82 Cash 4,018 Purchases 5,880 Cash 5,880 Accounts payable 6,000 Purchases discounts 120 Cash 5,880 Accounts payable 5,880 Cash 5,880 Cash 5,880 Purchases discounts 120 Accounts payable 6,000

Answer 1

Correct Option is :   Accounts payable 6,000 Purchases discounts 120 Cash 5,880

Account Titles & Explanation	Debit	Credit
Accounts Payable	$6,000
Purchase Discount (6000*2%)		$120.00
Cash (6000-120)		$5,880.00