Recording Payment for Purchased Goods with Discounts: Accounts

Your Answer Jello's Market purchased $1,000 of goods on account with terms of 2f10,nf30. They returned $200 of the goods due to defect the next day. It Jello pays for the purchase within the discount period and uses the perpetual inventory system, the requiredjournal entry to record the payment would: debit Accounts Payable $800; credit Cash $780; and credit Merchandise Inventory $20 Reason: Discount is $800 x 2%: $6 $200 was returned, so the discount is based on $800. debit Accounts Payable $800 and credit Cash $800 Reason: You need to consider the discount. debit Accounts Payable $1,000; credit Cash 980; and credit Purchase Discounts $20 Reason: Take a discount on only $800 of the balance still owed. Purchase Discounts is not involved. debit Accounts Payable $800; credit Merchandise Inventory $16; and credit Cash $784 Correct Answer debit Accounts Payable $800; credit Merchandise inventory $16; and credit Cash $284