Question

Required information (The following information applies to the questions displayed below.] On July 15, 2021, the Nixon Car Company purchased 1,900 tires from the Harwell Company for $40 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. Answer is not complete. 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.) General Journal Credit No 1 Date July 15, 2021 Debit 76,000 Inventory Accounts payable 76,000 July 23, 2021 76,000 X Accounts payable Cash Inventory 3,040 X 72,960

Answer 1

		Debit	Credit
July 15,2021	Inventory	72960		=(1900*40)*(1-4%)
	Accounts payable		72960
July 23,2021	Accounts payable	72960
	Cash		72960
2
		Debit	Credit
August 15,2021	Accounts payable	72960
	Interest expense	3040
	Cash		76000