Recording Cash Discounts Schrand Corporation purchases materials from a supplier that offers credit terms of 2/15, n/60. It purchased $12.500 of merchandise inventory from that supplier on January 20, 2019. Required a. Assume that Schrand Corporation paid the invoice on February 15, 2019. Prepare journal entries to record the purchase of this inventory and the cash payment to the supplier using the net-of-discount method. General Journal 1/20 2/15 In Cash Inventory 1/20 2/15 Description Debit Accounts payable Interest expense-discounts lost b. Set up the necessary T-accounts and post the journal entries from question a to the accounts. Cash (A) Accounts Payable (L) Credit 1/20 2/15 c. Compute the cost of a lost discount as an annual percentage rate. Round your answer to one decimal place. 1/20 2/15 Inventory (A) Interest Expense-Discounts Lost (E) 1/20 2/15
Recording Cash Discounts Schrand Corporation purchases materials from a supplier that offers credit terms of 2/15, n/60. It purchased $12.500 of merchandise inventory from that supplier on January 20, 2019. Required a. Assume that Schrand Corporation paid the invoice on February 15, 2019. Prepare journal entries to record the purchase of this inventory and the cash payment to the supplier using the net-of-discount method. General Journal 1/20 2/15 In Cash Inventory 1/20 2/15 Description Debit Accounts payable Interest expense-discounts lost b. Set up the necessary T-accounts and post the journal entries from question a to the accounts. Cash (A) Accounts Payable (L) Credit 1/20 2/15 c. Compute the cost of a lost discount as an annual percentage rate. Round your answer to one decimal place. 1/20 2/15 Inventory (A) Interest Expense-Discounts Lost (E) 1/20 2/15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Recording Cash Discounts
Schrand Corporation purchases materials from a supplier that offers credit terms of 2/15, n/60. It purchased $12.500 of merchandise inventory from that supplier on January 20, 2019.
Required
a. Assume that Schrand Corporation paid the invoice on February 15, 2019. Prepare journal entries to record the purchase of this inventory and the cash payment to the supplier using the net-of-discount method.
General Journal
1/20
2/15
1/20
2/15
Description
In
0
Cash
Inventory
Accounts payable
Interest expense-discounts lost
b. Set up the necessary T-accounts and post the journal entries from question a to the accounts.
Cash (A)
Accounts Payable (L)
Debit
Credit
1/20
2/15
c. Compute the cost of a lost discount as an annual percentage rate.
Round your answer to one decimal place.
1/20
2/15
Inventory (A)
Interest Expense-Discounts Lost (E)
1/20
2/15
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