Dec 6: Bought inventory from a new supplier, Bailey Corp (Vendor# 210-25), on credit for the gross amount of $70,000 (invoice #CC1206). Bailey’s terms for repayment are 3/10, n/30. Dec 11: Bought inventory items from Nelson Industries on account for the gross amount of $25,000 (invoice #NI1211). Terms 2/30, n/60. Dec 13: Bought inventory items from Centennial, Inc. on account for the gross amount of $50,000 (invoice #TH1213). Terms 3/15, n/30 Dec 18: Purchased inventory items on account from Bailey Corp. for a gross amount of $25,000 (invoice #CC1218). Terms 3/10, n/30.
Could anyone help me understand this problem? How would you put these statements in a purchase journal?
Dec 6: Bought inventory from a new supplier, Bailey Corp (Vendor# 210-25), on credit for the gross amount of $70,000 (invoice #CC1206). Bailey’s terms for repayment are 3/10, n/30.
Dec 11: Bought inventory items from Nelson Industries on account for the gross amount of $25,000 (invoice #NI1211). Terms 2/30, n/60.
Dec 13: Bought inventory items from Centennial, Inc. on account for the gross amount of $50,000 (invoice #TH1213). Terms 3/15, n/30
Dec 18: Purchased inventory items on account from Bailey Corp. for a gross amount of $25,000 (invoice #CC1218). Terms 3/10, n/30.
| Date | Vendor Name (AP Subsidiary #) | Purchases (debit) | Accounts Payable (credit) |
| Total |
Purchase Journal :— It is a subsidiary book of account in which credit purchases of inventory are recorded.
Journal entry at the time of purchase of inventory on account are as follows :—
Dr. Purchases/Inventory ...XXX
Cr. Accounts Payable ...........XXX
Amount of purchase is debited. Therefore it is reported as debit in purchase journal.
Amount of accounts payable is credited. Therefore it is recorded in credit of purchase journal.
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