Record the invoice balance less discount as one net amount. The customer records a credit purchase and accounts payable. The vendor records the credit sale and accounts receivable.  $500 – $10 discount = $490 net amount recorded  This example shows the transactions, often automated using accounting software. To record a purchase when the customer receives the goods: Purchases: $490 Accounts payable: $490 To pay the invoice included in the accounts payable balance early: Accounts payable: $490 Cash: $490 If the company doesn’t pay early, then the entry is: Accounts payable: $490 Purchase Discounts: $10 Cash: $500 Purchase discounts is a contra account to purchases but increase purchases if not paid early.