You purchase 8 pallets of patio stone on account at a cost of $200 per pallet with a 20% contractor discount. You will pay in three installments. How much will the entry for the first installment payment be?

The journal entries should be as follows:

Day 1, you purchase the materials (8 pallets x $200 x 80%)

Dr Materials Inventory account 1,280 Cr Accounts Payable account 1,280

Day 31, you pay the first installment ( = $1,280 / 3)

Dr Accounts Payable account 426.67 Cr Cash account 426.67

Day 61, you pay the second installment ( = $853.33 - $426.66)

Dr Accounts Payable account 426.67 Cr Cash account 426.67

Day 91, you pay the third installment

Dr Accounts Payable account 426.66 Cr Cash account 426.66