Farthington Soccer Supplies Purchases Merchandise from a Supplier on Credit

Multiple Choice

Farthington Soccer Supplies purchases merchandise from a supplier on credit, terms 2/10, n/30 for $15,300. Assume the company uses a perpetual inventory system, and records purchases using the gross method. When recording the payment of the invoice within the discount period in its cash disbursement journal, Farthington would enter:

A) $15,300 in the Accounts Payable Dr. column; $14,994 in the Cash Cr. column; and $306 in the Inventory Cr. column.
B) $14,994 in the Accounts Payable Dr. column and $14,994 in the Cash Cr. column.
C) $15,300 in the Cash Cr. column and $15,300 in the Accounts Payable Dr. column.
D) $15,300 in the Cash Cr. column and $15,300 in the Inventory Dr. column.
E) $15,300 in the Inventory Cr. column; $14,994 in the Accounts Payable Dr. column; and $306 in the Inventory Cr. column.