Chapter 8 - Valuation of Inventories: A Cost-Basis Approach - Concepts for Analysis - Instructions - Page 484: CA8-1b

Inventory................................................................................................ 35,300 …………….Accounts Payable—Supplier........................................................... 35,300 Inventory.................................................................................................. 1,500 …………….Accounts Payable—Transportation Co......................................... 1,500

Debit inventory (goods) for the invoice price and credit accounts payable (Supplier) with the same amount. The client will also debit inventory account for the freight charges and credit accounts payable (transportation coast).