Question

On April 18, 2017, Botanica Company, a garden retailer purchased $9,800 of supplies, terms 2/10, n/30 from Whitetail Garden Center. Botanica then returned $800 of material they decided they no longer needed before the discount period and then remitted payment for the difference.

Show the journal entry in its proper form, meaning, indent for the credit side of the entry, use proper account titles, and a description of the entry for the:

Initial purchase (on the buyer's side)

The return of the merchandise (on the seller's side)

The payment made by Botanica (on the buyer's side)

Answer 1

Journal Entries:

1) In the books of Botanica Company (buyer)
Date	General Journal	Debit	Credit
Apr. 18, 2017	Supplies	$9,800
	Accounts Payable - Whitetail Garden Center		$9,800
	(To record the purchase of supplies on account)
	Accounts Payable - Whitetail Garden Center	$800
	Supplies		$800
	(To record the purchase returns)
Within discount period	Accounts Payable - Whitetail Garden Center ($9,800 - $800)	$9,000
	Supplies ($9,800*2/100)		$180
	Cash ($9,000 - $180)		$8,820
	(To record the payment made to Whitetail Garden Centre after discount)
2) In the books of Whitetail Garden Center (seller)
Date	General Journal	Debit	Credit
Apr. 18, 2017	Accounts Receivable - Botanica Company	$9,800
	Sales Revenue		$9,800
	(To record the sale of merchandise on account)
	Sales Returns and Allowances	$800
	Accounts Receivable - Botanica Company		$800
	(To recod the sales returns)
Within discount period	Cash ($9,000 - $180)	$8,820
	Sales Discounts ($9,000 * 2/100)	$180
	Accounts Receivable - Botanica Company ($9,800 - $800)		$9,000
	(To record receipt of amount that was owed from credit sales)