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Kitchen Electrics uses a perpetual inventory system. The following are three recent merchandising transactions. Apr....

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Kitchen Electrics uses a perpetual inventory system. The following are three recent merchandising transactions. Apr. 10 Purchased 10 refrigerators from Polar Co. on account. Invoice price, $600 per unit, for a total of $6,000. The terms of purchase were 2/10, n/30. Apr. 15 Sold one of these refrigerators for $900 cash. Apr. 20 Paid the account payable to Polar Co. within the discount period. 1 Instructions a. Prepare journal entries to record these transactions assuming that Kitchen Electrics records purchases of merchandise at: 1. Net cost 2. Gross invoice price b. Assume that Kitchen Electrics did not pay Polar Co. within the discount period but instead paid the full invoice price on May 10 . Prepare journal entries to record this payment assuming that the original liability had been recorded at 1. Net cost 2. Gross invoice price

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