Rae Company Uses a Perpetual Inventory System and Made a Purchase

Short Answer

Rae Company uses a perpetual inventory system and made a purchase of merchandise on credit from Tyree Corporation on August 3, for $9,000, terms 2/10, n/45. On August 10, Rae makes the appropriate payment to Tyree. The entry on August 10 for Rae Company is a. $\begin{array}{lr}\text {Accounts Payable }\quad\quad\quad\quad\quad\quad\quad&9,000\\\text {Cash }&&9,000\\\end{array}$

b. $\begin{array}{lr}\text { Accounts Payable.}\quad\quad\quad\quad\quad\quad\quad&8,820\\\text {Cash }&&8,820\\\end{array}$

c. $\begin{array}{lr}\text {Accounts Payable. }&9,000\\\text { Purchase Returns and Allowances }&&180\\\text {Cash }&&8,820\\\end{array}$

d. $\begin{array}{lr}\text {Accounts Payable. }\quad\quad\quad\quad\quad\quad\quad&9,000\\\text {Inventory }&&180\\\text {Cash }&&8,820\\\end{array}$