April 2 : Purchased goods of rupees 200000 less trade discount 10% from Prabhat electric co on the terms that on payment received within 10 days cash discount will be allowed at the rate 5% and on payment received with the next 20 days 2% cash discount will be allowed .
April 5: paid amt. to prabhat electric co.
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Explanation:
April 21\
Purchase A/c Dr 1,80,000.00
To Prabhat Electric Co. 1,80,000.00
(Being purchased goods of rupees 200000 less trade discount 10% from Prabhat electric co on the terms that on payment received within 10 days cash discount will be allowed at the rate 5% and on payment received with the next 20 days 2% cash discount will be allowed )
April 5
Prabhat Electric Co A/c Dr 1,80,000.00
To Bank A/c 1,71,000.00
To Discount A/c 9,000.00
(Being amount paid within 10 days and availed a discount of 5%)
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