computer phones, inc. paid cash on account to software supply, $817; covering purchase invoice no. 2254 for…

computer phones, inc. paid cash on account to software supply, $817; covering purchase invoice no. 2254 for $860, less a 5% discount, $43. the journal entry for computer phones, inc. to record this transaction is: a. debit accounts payable/software supply, $817; credit cash, $817. b. debit accounts payable/software supply, $860; credit cash, $860. c. debit purchases discount $43 and debit cash $817; credit accounts payable/software supply $860. d. debit accounts payable/software supply, $860; credit purchases discount $43 and credit cash $817.

computer phones, inc. paid cash on account to software supply, $817; covering purchase invoice no. 2254 for $860, less a 5% discount, $43. the journal entry for computer phones, inc. to record this transaction is: a. debit accounts payable/software supply, $817; credit cash, $817. b. debit accounts payable/software supply, $860; credit cash, $860. c. debit purchases discount $43 and debit cash $817; credit accounts payable/software supply $860. d. debit accounts payable/software supply, $860; credit purchases discount $43 and credit cash $817.

Answer

Answer:

D. debit Accounts Payable/Software Supply, $860; credit Purchases Discount $43 and credit Cash $817.

Explanation:

Step1: Understand the transaction

Computer Phones, Inc. owes Software Supply $860 (Purchase Invoice amount).

Step2: Calculate the discount

The discount is 5% of $860, which is $860×0.05 = $43.

Step3: Determine the cash paid

The cash paid is $860 - $43=$817.

Step4: Analyze the journal - entry

When recording the payment, the company reduces the Accounts Payable balance (debit Accounts Payable for the full invoice amount of $860). It also records the discount received (credit Purchases Discount for $43) and the cash paid out (credit Cash for $817).