Question

Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
  

Apr.		2		Purchased $6,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
		3		Paid $310 cash for shipping charges on the April 2 purchase.
		4		Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.
		17		Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
		18		Purchased $12,900 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
		21		After negotiations, received from Frist a $400 allowance toward the $12,900 owed on the April 18 purchase.
		28		Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

• 1

  Purchased $6,800 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.

• 2

  Paid $310 cash for shipping charges on the April 2 purchase.

• 3

  Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.

• 4

  Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.

• 5

  Purchased $12,900 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.

• 6

  After negotiations, received from Frist a $400 allowance toward the $12,900 owed on the April 18 purchase.

• 7

  Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Journal entries

no	account and explanation	debit	credit
1	Merchandise inventory	6800
	Account payable		6800
	(To record purchase)
2	Merchandise inventory	310
	Cash		310
	(To record shipping charges)
3	Account payable	600
	Merchandise inventory		600
	(To record purchase return)
4	Account payable (6800-600)	6200
	Bank (6200*98%)		6076
	Merchandise inventory		124
	(To record amount paid)
5	Merchandise inventory	12900
	Account payable		12900
	(To record purchase)
6	Account payable	400
	Merchandise inventory		400
	(To record allowance)
7	Account payable	12500
	Cash (12500*99%)		12375
	Merchandise inventory		125
	(To record amount paid)