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Chapter 20

Example 2: Solution

Five per cent is deductible, so only $190 is paid (by cheque). The bank
account will be credited with $190, and the account of XY will be debited, thus:
XY
Dr $ Cr $
07 Jan Bank 190 01 Jan Purchases 200

The discount would then be recorded as:

Debit XY $10
Credit Discount received $10

And updated in the ledger account of XY as:

XY
Dr $ Cr $
07 Jan Bank 190 01 Jan Purchases 200
Discount
received 10

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