Question

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Exercise 5-02 a-b Information related to Harwick Co. is presented below. 1. On April 5, purchased merchandise on account from Botham Company for $23,000, terms 2/10, net/30, FOB shipping point. 2. On April 6, paid freight costs of $900 on merchandise purchased from Botham. 3. On April 7, purchased equipment on account for $26,000. 4. On April 8, returned damaged merchandise to Botham Company and was granted a $3,000 credit for returned merchandise. 5. On April 15, paid the amount due to Botham Company in full. Prepare the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts.) No. Date Account Titles and Explanation Debit Credit

Answer 1

Journal entry

Date	General Journal	Debit	Credit
Apr 5	Merchandise inventory	23000
	Account payable		23000
Apr 6	Merchandise inventory	900
	Cash		900
Apr 7	Equipment	26000
	Account payable		26000
Apr 8	Account payable	3000
	Merchandise inventory		3000
Apr 15	Account payable	20000
	Cash (19600*98%)		19600
	Merchandise inventory		400

b) Journal entry

Date	account and explanation	Debit	credit
May 4	Account payable	20000
	Cash		20000