The correct answer is:
|
Dr Purchases |
$400 |
|
|
Dr Trade Payables |
$250 |
|
|
Cr Cash |
|
$650 |
A payment is a credit to the cash account. The payment to J Bloggs is a cash purchase and so the double entry is Dr Purchases, Cr Cash. Remember that the purchase from J Doe has already been recorded as Dr Purchases, Cr Trade Payables, so the payment of cash to clear the invoice should now be recorded as Dr Trade Payables, Cr Cash.
