Question

Prepare journal entries to record each of the following transactions of a merchandising company. The company uses a perpetual inventory system and the gross method. Nov. 5 Purchased 1,350 units of product at a cost of $20 per unit. Terms of the sale are 4/10, n/60; the invoice is dated November 5. Nov. 7 Returned 50 defective units from the November 5 purchase and received full credit. Nov. 15 Paid the amount due from the November 5 purchase, minus the return on November 7.

• Purchased 1,350 units of product at a cost of $20 per unit. Terms of the sale are 4/10, n/60; the invoice is dated November 5.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Nov 05	Merchandise inventory
	Accounts payable

Date	General Journal	Debit	Credit
Nov 07	Accounts payable
	Merchandise inventory

Date	General Journal	Debit	Credit
Nov 15	Accounts payable
	Merchandise inventory
	Cash

Answer 1