The Nelson Company bought inventory for $50,000 on terms of 2/15, n/60. It pays for the first $37,500 of inventory purchased within the discount period and pays for the remaining $12,500 two months later. Required Prepare the journal entries to record the purchase and the payment under both the (1) Gross price and (2) Net price methods.
Chapter 8, Exercises #6
The Nelson Company bought inventory for $50,000 on terms of 2/15, n/60. It pays for the first $37,500 of inventory purchased within the discount period and pays for the remaining $12,500 two months later.
Required
Prepare the journal entries to record the purchase and the payment under both the
(1) Gross price and
(2) Net price methods.
Required
Prepare the journal entries to record the purchase and the payment under both the
(1) Gross price and
(2) Net price methods.
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Answer
1. Inventory (or Purchases) 50,000 Accounts Payable 50,000 To record invent…View the full answer
Related Book For 
Intermediate Accounting
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
ISBN: 978-0324300987