Problem
On July 15, year 1, the Volt Truck Company purchased 1, 500 tires from the Mellis Company for $100 each. The terms of the sale were 2/10, n/30. Volt uses a periodic inventory system and the gross method of accounting for purchase discounts.
Required:
Prepare the journal entries to record the purchase on July 15 and payment on July 23, year 1.
Prepare the journal entry to record the payment on August 15, year 1.
If Volt instead uses a perpetual inventory system, explain any changes to the journal entries created in requirements 1 and 2.