Preparing journal entries for merchandising activities LO1
Prepare journal entries to record the following merchandising transactions of Mason Company.
July 3 Purchased merchandise from OLB Corp. for $15,000 under credit terms of 1/10, n/30, FOB destination, invoice dated July 3.
10 Purchased merchandise from Rupert Corporation for $14,200 under credit terms of 1/10, n/45,
FOB shipping point, invoice dated July 10. The invoice showed that at Mason’s request, Rupert paid the $500 shipping charges and added that amount to the bill. (Recall: Discounts are not applied to freight and shipping charges.)
14 After negotiations with Rupert Corporation concerning problems with the merchandise purchased on July 10, Mason received a credit memorandum from Rupert granting a price reduction of $2,000.
20 Paid the amount due Rupert Corporation for the July 10 purchase less the price reduction granted.
31 Paid OLB Corp. the amount due from the July 3 purchase.
Check July 20, Cr. Cash, $12,578
July 31, Cr. Cash, $15,000
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