Purchase Discounts IP Company started the accounting period with $5,000 in cash, 54,000 in Common Seck, and $1,000 in Retained Earings The following events occured in Year2 Purchased entry that sets $1,200 on account. The vestory was purchased under the terms 2/10/30 2. Paid for the inventary within 10 days of purchase Cat A 5.000 430s Re Exp NE Cash Equity Flow Anna Payable Rat Sth 4000,000 0:00 / 8:41 1x " :: Amarillo Company experienced the following events during its first accounting period. (1) Purchased $5,000 of inventory on account under terms 1/10/n30. (2) Returned $1,000 of the inventory purchased in Event 1. (3) Paid the remaining balance in accounts payable within the discount period for the inventory purchased in Event 1. Based on this information the journal entry necessary to record the purchase discount is Account Titles Debit Credit Inventory 40 Accounts Payable 40 Help Account Titles Debit Credit Discount on Inventory 50 Inventory 50 Help Account Titles Debit Credit nation Accounts Payable Inventory 40 40 Help Seve & Exit Sube Account Titles Debit Credit Accounts Payable 50 Inventory 50 Help Save