tice Problems for Exam 2 Help Save & 6 Exercise 8-10 Purchase discounts; the net

Question

tice Problems for Exam 2 Help Save & 6 Exercise 8-10 Purchase discounts; the net method [Lo8-3] On July 15, 2018, the Nixon Car Company purchased 2,000 tires from the Harwell Company for $41 each. The terms of the sale were 2/10, n/30. Nixon uses a periodic inventory system and the net method of accounting for purchase discounts 04 Required: 1. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2018. 2. Prepare the journal entry to record the payment on August 15, 2018. 3. If Nixon instead uses a perpetual inventory system, explain any changes to the journal entries created in requirements 1 and 2 below. Complete this question by entering your answers in the tabs Required 1 Required 2 Required 3 Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2018. (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 2 Record purchase of tires.

Explanation / Answer

1) Date Account titles & Explanations Debit Credit 15-Jul purchase 80360 Accounts payable 80,360 (2000*41)*98% 23-Jul Accounts payable 80,360 cash 80,360 2) 15-Aug Accounts payable 80,360 purchase discount forfeited/interest expense 1,640 cash 82000 3) thus we see under perpetual method instead of purchase account we debit merchandise inventory

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