On may 26 2011 the kentucky corp acquired 43000 of, Ask an Expert

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On May 26, 2011, the Kentucky Corp. acquired $43,000 of merchandise inventory. This purchase was subject to a "1.4/20; net 80" cash discount. Kentucky maintains a perpetual inventory and accounts for cash discounts using the gross method. Kentucky paid for this purchase on June 13, 2011. Required:
(a) Record the May 26, 2011 purchase by Kentucky.
(b) What annual interest rate would Kentucky have paid had it not taken this discount?
(c) Record the June 13, 2011 payment for this purchase by Kentucky.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9979417

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