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Recording Cash Discounts On November 15, 2018, Shields Company purchased inventory costing $6,200 on credit....

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Accounting

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Recording Cash Discounts On November 15, 2018, Shields Company purchased inventory costing $6,200 on credit. The credit terms were 2/10, n/30. a. Assume that Shields Company paid the invoice on November 23, 2018. Prepare journal entries to record the purchase of this inventory and the cash payment to the supplier using the net-of- discount method. Credit 0 General Journal Date Description Debit 11/15 Inventory 6,076 Accounts Payable 0 11/23 Accounts Payable 6,076 Cash A 0 6,076 0 6,076 b. Set up the necessary T-accounts and post the journal entries from question a. to the accounts. Cash Inventory 6,076 Accounts Payable 6,076 6,076 6,076 x 6,076 6,076 x C. Compute the cost of a lost discount as an annual percentage rate. Round answer to one decimal place (i.e., 34.6%). 149 X %

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