Trade Discount and Cash Discounts

Merchandise was purchased on account from Jacob's Distributors on May 17. The purchase price was $800, less a 10% trade discount and credit terms of 2/10, n/30.

1.Calculate the net amount to record the invoice, less the 10% trade discount.

$

2.Calculate the amount to be paid on this invoice within the discount period.

$

3.Journalize the purchase of the merchandise on May 17 in a general journal. Journalize the payment on May 27 (within the discount period).

Page:DATEACCOUNT TITLEDOC.

NO.POST.

REF.DEBITCREDIT120--

May 17Purchases

12Accounts Payable/Jacob's Distributors

23Purchased merchandise3427 Accounts Payable/Jacob's Distributors

45Cash

56Purchases Discounts

67Paid invoice within discount period7