Question

This information relates to Metlock Co. 1. 2. 3. 4. 5. On April 5, purchased merchandise from Ivanhoe Company for $26,200, terms 3/10, n/30. On April 6, paid freight costs of $540 on merchandise purchased from Ivanhoe. On April 7, purchased equipment on account for $30,500. On April 8, returned $3,900 of April 5 merchandise to Ivanhoe Company. On April 15, paid the amount due to Ivanhoe Company in full. (a) Prepare the journal entries to record the transactions listed above on Metlock Co.'s books. Metlock Co. uses a perpetual inventory system. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit No. 1.

Answer 1

Requirement (a):

No.	Date	Account title and explanation	Debit	Credit
1	April 5	Merchandise inventory	$26,200
		Accounts payable		$26,200
		[To record purchase of merchandise on account]
2	April 6	Merchandise inventory	$540
		Cash		$540
		[To record payment for freight]
3	April 7	Equipment	$30,500
		Accounts payable		$30,500
		[To record purchase of equipment on account]
4	April 8	Accounts payable	$3,900
		Merchandise inventory		$3,500
		[To record purchase returns]
5	April 15	Accounts payable (26,200-3,900)	$22,300
		Cash		$21,631
		Merchandise inventory (22,300 x 3%)		$669
		[To record payment for accounts payable]

Requirement (b):

If paid on May 4 then no discount is applied. So that entry is

Date	Account title and explanation	Debit	Credit
May 4	Accounts payable (26,200-3,900)	$22,300
	Cash		$22,300
	[To record payment for accounts payable]