Answer:
Stylon Company.
General Journal
Net Method
The following entries have been passed using net method.
Sr. No Particulars Debit Credit
a. Merchandise Inventory 47040
Accounts Payable 47040
Purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system
b. Accounts Payable 7350
Merchandise Inventory 7350
Stylon returned merchandise with an invoice amount of $7,500,
c. Accounts Payable 39690
Cash 39690
Stylon's entry to record the payment within the discount period of 10 days
d. Discount Lost 810
Accounts Payable 810
Accounts Payable 40500
Cash 40500
Stylon's entry to record the payment beyond the discount period of 10 days.