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 $7,000 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point. 3 Paid $400 cash for shipping charges on the April 2 purchase. 4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $ 750. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise. 18 Purchased $13,300 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 $13,300 owed on the April 18 purchase. 28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Journal entries

Date	General journal	Debit	Credit
Apr 2	Merchandise inventory	7000
	Account payable		7000
Apr 3	Merchandise inventory	400
	cash		400
Apr 4	Account payable	750
	Merchandise inventory		750
Apr 17	Account payable	6250
	Bank (6250*98%)		6125
	Merchandise inventory		125
Apr 18	Merchandise inventory	13300
	Account payable		13300
Apr 21	Account payable	400
	Merchandise inventory		400
Apr 28	Account payable	12900
	Bank		12771
	Merchandise inventory		129