Bhakti Games is a chain of board game stores. Record entries for the following transactions related to Bhakti’s purchase of inventory. A. On October 5, Bhakti purchases and receives inventory from XYZ Entertainment for \$5,000 with credit terms of 2/10 net 30. B. On October 7, Bhakti returns \$1,000 worth of the inventory purchased from XYZ. C. Bhakti makes payment in full on its purchase from XYZ on October 14.

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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

Solutions

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Section
FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 12, Problem 8EA
Textbook Problem
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Bhakti Games is a chain of board game stores. Record entries for the following transactions related to Bhakti’s purchase of inventory.A. On October 5, Bhakti purchases and receives inventory from XYZ Entertainment for \$5,000 with credit terms of 2/10 net 30.B. On October 7, Bhakti returns \$1,000 worth of the inventory purchased from XYZ.C. Bhakti makes payment in full on its purchase from XYZ on October 14.

To determine

Concept introduction:

Purchase terms may contain the cash discount for early payment of the credit purchase. For example, a ter. 2/10, n 30 means there shall be a 2% discount allowed if the payment is made within 10 days and the total credit period allowed is 30 days.

Journal Entry: In journal entry, a company records all the business transactions which are in a monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To prepare:

The journal entries for the given transactions.

Explanation of Solution

The journal entries for the given transaction are explained as follows:

 Journal entries S.No. Date Account Title Debit Credit A Oct. 5 Purchases \$ 5,000 Accounts Payable \$ 5,000 (Being purchase made on account) B Oct...

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