Tracy Company, a manufacturer of air conditioners, sold 120 units to Thomas Company on November 17, 2021. The units have a list price of $550 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Thomas uses a perpetual inventory system.

Exercise 8-11 (Algo) Parts 1 and 2

Required: 1. Prepare the journal entries to record the (a) purchase by Thomas on November 17 and (b) payment on November 26, 2021. Thomas uses the gross method of accounting for purchase discounts. Record the purchase of air conditioners 2. Prepare the journal entry for the payment, assuming instead that it was made on December 15, 2021.Alternatively, record payment on December 15 using the gross method of accounting for purchase discounts.