Accounts Payable and Cash Discounts On January 4, 2007 Dunbar Company purchased, on credit, 2,000 television sets

Question:

and Cash Discounts On January 4, 2007 Dunbar Company purchased, on credit, 2,000 television sets at $500 each. Terms of the purchase were 2/10, n/30. Dunbar paid for one-fifth of these sets within 10 days and the remaining four-fifths by January 31.

Required
Prepare the journal entries on Dunbar Company’s books, assuming that it uses the net price method to record its merchandise. (Dunbar uses a perpetual inventory system.)

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...