If a company previously purchased $2,000 of merchandise on account and is now paying for it during the discount period with the terms of 2/10, n/30, and the company uses the perpetual inventory system, the journal entry would be Accounts Payable Cash 2,000 2,000 Merchandise Inventory 2,000 Accounts Payable 2,000 Accounts Payable 1,960 Merchandise Inventory 1,960 Accounts Payable 2,000 Merchandise Inventory 40 Cash 1,960 If a company previously purchased $2,000 of merchandise on account and is now paying for it during the discount period with the terms of 2/10, n/30, and the company uses the perpetual inventory system, the journal entry would be Accounts Payable Cash 2,000 2,000 Merchandise Inventory 2,000 Accounts Payable 2,000 Accounts Payable 1,960 Merchandise Inventory 1,960 Accounts Payable 2,000 Merchandise Inventory 40 Cash 1,960