In transactions involving trade discounts, the trade discounts are deducted from the list prices to arrive at the selling prices. Both sellers and buyers record the transactions at the selling prices. Record the following transaction involving a trade discount: . May. 15 Bought merchandise on account from Tea Company, $5,650, received a 20% trade discount, invoice No. 111, dated May 10; terms 2/10, n/EOM. PAGE 1 CREDIT DATE 20-- May 15 Purchases GENERAL JOURNAL DESCRIPTION Accounts Payable, Tea Company Purchased merchandise from Tea Company, Inv. No. 111 POST. REF. DEBIT 4,520 4520

In transactocis involving trade discounts, the trade discounts are deducted frem the list prices to arrive at the seling prices. Both sellers and buyers record the transactions at the seiling prices. Pecord the folowing transaction involving a trade discount: - May. 15 Bought merchandise on bccount frem Tea Company, $5,650, tecelived a 20% trade eiscount, invoice kio, 111 , dated May 10, terms 2/10, ry EOM