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21) April 4, 2020 Smith and West, who uses the periodic inventory system, purchased 1000 widgets from ABC company on account, at a cost of $5 each. HST is applied and they charged the goods, PI-26. Terms: 5/10 n/30. What would be the journal entry to record this transaction? 1. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - Cash $5,650   2. Debit - Cash $5,650 </> Credit - Purchases $5,000, HST Recoverable $650   3. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - ABC Company $5,650   4. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - Smith and Jones $5,650

21) April 4, 2020 Smith and West, who uses the periodic inventory system, purchased 1000 widgets from ABC company on account, at a cost of $5 each. HST is applied and they charged the goods, PI-26. Terms: 5/10 n/30. What would be the journal entry to record this transaction? 1. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - Cash $5,650   2. Debit - Cash $5,650 </> Credit - Purchases $5,000, HST Recoverable $650   3. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - ABC Company $5,650   4. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - Smith and Jones $5,650

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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21) April 4, 2020 Smith and West, who uses the periodic inventory system, purchased 1000 widgets from ABC company on account, at a cost of $5 each. HST is applied and they charged the goods, PI-26. Terms: 5/10 n/30. What would be the journal entry to record this transaction?

1. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - Cash $5,650
 
2. Debit - Cash $5,650 </> Credit - Purchases $5,000, HST Recoverable $650
 
3. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - ABC Company $5,650
 
4. Debit - Purchases $5,000, HST Recoverable $650 </> Credit - A/P - Smith and Jones $5,650
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