Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 1/10, net 30, for $10,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period? a.Accounts Payable—Emma Co., debit $10,650; Cash, credit $10,650 b.Accounts Payable—Emma Co., debit $10,000; Freight In, debit $750; Cash, credit $10,750 c.Accounts Payable—Emma Co., debit $10,750; Merchandise Inventory, debit $100; Cash, credit $10,850 d.Accounts Payable—Emma Co., debit $10,000; Cash, credit $10,000
Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 1/10, net 30, for $10,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period? a.Accounts Payable—Emma Co., debit $10,650; Cash, credit $10,650 b.Accounts Payable—Emma Co., debit $10,000; Freight In, debit $750; Cash, credit $10,750 c.Accounts Payable—Emma Co., debit $10,750; Merchandise Inventory, debit $100; Cash, credit $10,850 d.Accounts Payable—Emma Co., debit $10,000; Cash, credit $10,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 1/10, net 30, for $10,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record the payment for the merchandise if Isabella Co. pays within the discount period?
a.Accounts Payable—Emma Co., debit $10,650; Cash, credit $10,650
b.Accounts Payable—Emma Co., debit $10,000; Freight In, debit $750; Cash, credit $10,750
c.Accounts Payable—Emma Co., debit $10,750; Merchandise Inventory, debit $100; Cash, credit $10,850
d.Accounts Payable—Emma Co., debit $10,000; Cash, credit $10,000
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Journal is a place where journal entries are recorded in the book keeping system before ledger accounts. Here financial transactions are recorded in order of time.
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