On December 28, 2021, Videotech Corporation (VTC) purchased 15 units of a new satellite uplink system from Tristar Communications for $26,000 each. The terms of each sale were 1/10, n/30. VTC uses the gross method to account for purchase discounts and a perpetual inventory system. VTC paid the net-of-discount amount on January 6, 2022. Prepare the journal entries on December 28 and January 6 to record the purchase and paymen
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Ответ:
December 28, 2021
Merchandise $26,000 (debit)
Trade Payable $26,000 (credit)
January 6, 2022
Trade Payable $260 (debit)
Discount Received $260 (credit)
Being recognition of discount received
Trade Payable $25,740 (credit)
Cash $25,740 (credit)
Being settlement of an account
Explanation:
December 28, 2021
Recognise Liability and an Asset
January 6, 2022
Recognise Cash and an Income and also de-recognise a Liability
Ответ:
December 28, 2021 Entry:
DR: Satellite uplink systems($26,000*15) $390,000
CR: Accounts Payable(Tristar Communication) $390,000
(To record purchase of Satellite uplink systems from Tristar Communication on credit)
Entry on January 6, 2022:
DR: Accounts Payable(Tristar Communication) $ 390,000
Cr: Cash Discount (390,000×1%) $3,900
Cr: Cash/Bank $ 386,100
Explanation:
On Dec 28, 2021 as the units were purchased on credit so a liability is recognized against the purchase of assets.
On Jan 6, 2022 there has been a cash discount received of 1% of invoice value if payment has been made with 10 days of invoice. As the payment has been made with in 10 days so a cash discount is received which is categorized as an income for the business.
Ответ:
I have a strong feeling it has to be credit