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19 April, 23:43

Item 9Item 9 On September 12, Vander Company sold merchandise in the amount of $9,600 to Jepson Company, with credit terms of 2/10, n/30. The cost of the items sold is $5,900. Jepson uses the periodic inventory system and the gross method of accounting for purchases. Jepson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Jepson makes on September 18 is:

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  1. 20 April, 03:05
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    2/10, n/30 is a credit term arrangement where the seller agrees with the buyer that if payments are made within 10 days after purchase, he will enjoy a 2% discount or otherwise pay the full invoice amount at 30 days.

    As Jepson paid on the 18th of the same month which is 9 days after purchase, he is entitled to 2% discount on the sales.

    Journal Entry

    September 8

    Credit Sales - $9,600

    Debit receivable = $9,600

    September 18

    Debit Cash - $9,408

    Debit sales discount - $ 192

    Credit receivable - $9,600
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