Question

Record events in journal entries:

1) lawn pro purchased 25 patio furniture sets for later sale at a cost of 12120. the patio furniture sets were purchased with the terms 2/10, n/30 (at 25 the unit cost is 484.8, if info needed for journal entries)

2) lawn pro decided to pay 6000 of its accounts payable balance from event 1. before the discount period expired, so lawn pro first applied the 2% discount to the 6000 amount. (note: the actual payment is described in even 3.

3) lawn pro paid cash to settle parts of its own accounts payable balance as described in event 2

Answer 1

Journal Entries provided below.

Discount = 6000*2% = 120

Thanks

JOURNAL ENTRIES IN THE BOOKS OF LAWN PRO SI No Particulars Debit Credit 1 Purchases 12,120 To Account Payable (To record purchase of patio furniture sets 25 units at 484.4 each) 2 Account Payable 12,120 6,120 To Cash a/c 6,000 To Cash Discount Income (6000*2%) 120 (To record payment for purchases and gained 2% discount on payment within 10 days) 6,000 3 Account Payable To Cash a/c 6,000 (To record settlement of remaining balance of purchases)

JOURNAL ENTRIES IN THE BOOKS OF LAWN PRO SI No Particulars Debit Credit 12,120 12,120 6,120 6,000 1 Purchases To Account Payable (To record purchase of patio furniture sets 25 units at 484.4 each) 2 Account Payable To Cash a/c To Cash Discount Income (6000*2%) (To record payment for purchases and gained 2% discount on payment within 10 days) 3 Account Payable To Cash a/c (To record settlement of remaining balance of purchases) 120 6,000 6,000