Posted by Bobbi Loffredo on .
On July 15,2009, the Nixon Car Company purchased 1,000 tires from the Harwell Company for $50 each. The terms for the sale were 2/10, n/30. Nixon uses a periodic inventory system and the net method of accounting for purchase discounts.
1. prepare the journal entries to record the purchase on July 15 and payments on July 23, 2009.
2. Prepare the journal entry to record the payment on August 15, 2009.
3. If Nixon instead uses a perpetual inventory system, explain any charges to the journal entries created in requirements 1 and 2.