XYZ Company purchased inventory worth \$2,000 with terms 2.10 net 30 and paid within the discount period. What is the journal entry for the payment?

• A. Debit Inventory \$2,000; Credit Accounts Payable \$2,000
• B. Debit Accounts Payable \$2,000; Credit Cash \$1,960; Credit Inventory \$40
• C. Debit Cash \$1,960; Credit Accounts Payable \$2,000; Credit Inventory \$40
• D. Debit Accounts Payable \$2,000; Credit Cash \$2,000

Answer: (B)