Question

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Required Information [The following Information applies to the questions displayed below.) On July 15, 2021, the Nixon Car Company purchased 1.300 tires from the Harwell Company for $60 each. The terms of the sale were 4/10, n/30. Nixon uses a perpetual Inventory system and the net method of accounting for purchase discounts. Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021. 2. Prepare the journal entry for the payment, assuming Instead that it was made on August 15, 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record purchase of tires. Note: Enter debits before credits. General Journal Debit Credit Date July 15, 2021 Record entry Clear entry View general journal < Required 1 Required 2 >

Answer 1

1
Date	General Journal	Debit	Credit
July 15,2021	Inventory	74880		=(1300*60)*(1-4%)
	Accounts payable		74880
Date	General Journal	Debit	Credit
July 23,2021	Accounts payable	74880
	Cash		74880
2
Date	General Journal	Debit	Credit
August 15,2021	Accounts payable	74880
	Interest expense	3120
	Cash		78000	=1300*60
Note: The alternative account title for August 15 for Interest expense can be Inventory.