Course hero-1 - 88,200 The entry to make the payment is May...

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1. May 10, the company purchased goods from J co. for $90,000 terms 2/10 n/30. Purchases and AP are recorded at net amounts. Invoice paid May 18. 2. June 1, the company purchased equipment for $120,000 from Nolan co. paying $40,000 in cash and giving a one year, 9% note for balance. (1) The recording is at net amount. There is a discount of 2%, so the discount amount is 90,000X2%= 1,800 and the net amount is 90,000-1,800 = 88,200 The entry to record the purchase is May 10 Purchases/Inventory Dr . .................................................................. 88,200 Accounts Payable Cr. .........................................................................
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Unformatted text preview: 88,200 The entry to make the payment is May 18 Accounts Payable Dr. ............................................................................ 88,200 Cash Cr. .............................................................................................. 88,200 (2) Note amount is 120,000-40,000=80,000. The entry is June 1 Equipment Dr………………………………………………………120,000 Cash Cr……………………………………………………………40,000 Notes Payable Cr…………………………………………………. .80,000...
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This note was uploaded on 04/23/2010 for the course BUS 165B 165B taught by Professor Barrymishra during the Spring '10 term at UC Riverside.

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