Question
On July 1, Corrao Company purchased $1,100 of inventory on account with credit terms of 44/10, net 30. Corrao Company uses the perpetual inventory system.
On July 1, Corrao Company purchased $1,100 of inventory on account with credit terms of 44/10, net 30. Corrao Company uses the perpetual inventory system. On July 5, Corrao Company paid the amount due. What journal entry did they prepare on July 5?
A. debit Accounts Receivable for $1,100 and credit Cash for $1,100.
B. debit Purchase Discount for $44, debit Accounts Payable for $1,012 and credit Cash for $1,056.
C. debit Accounts Payable for $1,100 credit Inventory for $ 44and credit Cash for $1,056.
D. debit Accounts Payable for $1,056 and credit Cash for $1,056.
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