The amount that Arctic Adventures will record as the purchase transaction in the purchases journal under the Inventory Dr. column is C. $6, 400.
When a company makes a purchase, this amount is to be debited to the Inventory account in the Purchases Journal. This is because stock is being added to the company and is therefore an asset. Assets are debited when they increase.
The amount that will go as a debit to the inventory account will be the value of the purchases. In this case, that value is $ 6, 400 which means that this amount is to be debited to the Dr column of Inventory or Arctic Adventures.
If there are any discounts on the purchases, this goes to another account called the Purchase discount account. The account that will be credited for the purchase is the Account Payable account because the purchase was made on credit.
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