Question

4 Exercise 4-6 Recording sales, purchases, and cash discounts-buyer and seller LO P1, P2 Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 3/10, n/60 and an invoice price of $24,300. The merchandise had cost Mesa $16,573. Assume that both buyer and seller use a perpetual inventory system and the gross method. ints 1. Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period. 2. Prepare entries that the seller records for the (a) sale, (b) cash collection within the discount period, and (c) cash collection after the discount period. eBook Complete this question by entering your answers in the tabs below. Hint Required 1 Required 2 Ask Prepare entries that the buyer records for the (a) purchase, (b) cash payment within the discount period, and (c) cash payment after the discount period. Eeferences View transaction list Journal entry worksheet < 1 2 3 > Record Santa Fe Retailing purchased merchandise "as is" (with no returns) from Mesa Wholesalers with credit terms of 3/10, n/60 and an invoice price of $24,300. Note: Enter debits before credits. Transaction General Journal Debit Credit a Record entry Clear entry View general journal

Answer 1

Journal entry : In the books of Buyer

Transaction	General Journal	Debit	Credit
a	Merchandise inventory	24300
	Account payable		24300
b	Account payable	24300
	Cash (24300*97%)		23571
	Merchandise inventory		729
c	Account payable	24300
	Cash		24300

Journal entry : Seller

No	General Journal	Debit	Credit
1	Account receivable	24300
	Sales revenue		24300
	Cost of goods sold	16573
	Merchandise inventory		16573
2	Cash (24300*97%)	23571
	Sales discount	729
	Account receivable		24300
3	Cash	24300
	Account receivable		24300