Golf World sold merchandise to Mulligans for 10000 offering

Golf World sold merchandise to Mulligans for $10,000, offering terms of 1/15, n/30. Mulligans paid for the merchandise within the discount period. Both companies use perpetual inventory systems.

Solution

Journal entrywould be by assuming that the bill is paid within the discount period.

Purchase price = price - discount

=10000 - 1% = 9900