E5-2 This information relates to Rice Co. 1.
On April 5, purchased merchandise on account from Jax Company for $28,000, terms 2/10, n/30. 2.
On April 6, paid freight costs of $700 on merchandise purchased from Jax. 3.
On April 7, purchased equipment on account for $30,000. 4.
On April 8, returned $3,600 of April 5 merchandise to Jax Company. 5.
On April 15, paid the amount due to Jax Company in full.
Instructions
a. Prepare the journal entries to record the transactions listed above on Rice Co.'s books. Rice Co. uses a perpetual inventory system.
b. Assume that Rice Co. paid the balance due to Jax Company on May 4 instead of April 15. Prepare the journal entry to record this payment.
Journal entry
| Date | account and explanation | Debit | Credit |
| Apr 5 | Merchandise inventory | 28000 | |
| Account payable | 28000 | ||
| Apr 6 | Merchandise inventory | 700 | |
| Cash | 700 | ||
| Apr 7 | Equipment | 30000 | |
| Account payable | 30000 | ||
| Apr 8 | Account payable | 3600 | |
| Merchandise inventory | 3600 | ||
| Apr 15 | Account payable (28000-3600) | 24400 | |
| Cash | 23912 | ||
| Merchandise inventory | 488 | ||
B) Journal entry
| Date | account and explanation | Debit | Credit |
| may 4 | Account payable (28000-3600) | 24400 | |
| Cash | 24400 | ||
This information relates to Rice Co. 1.On April 5, purchased merchandise on account from...