Answer:
Staley Electronics
Journal Entries:
June 12:
Debit Accounts Payable $1,800
Credit Cash Account $1,782
Credit Cash Discount $18
To record the payment on account.
June 22:
Debit Accounts Payable $1,800
Credit Cash Account $1,800
To record the payment on account.
Explanation:
a) Data and Calculations:
June 5 Inventory purchase of 120 units at $15 each = $1,800
Trade terms = 1/10, n/30
The trade terms imply that Staley receives 1% cash discount if it pays for the inventory before 10 days, but can enjoy a credit period of 30 in total.
