Assuming that purchases are recorded at net amounts and that

Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: Prepare general journal entries to enter the transactions.

Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method. August 10 Purchased merchandise on account, $31,400, terms 2/10, n/30. 13 Returned part of the purchase of August 10, $1,500, and received credit on account. 15 Purchased merchandise on account, $36,200, terms 1/10, n/60. 25 Purchased merchandise on account, $42,600, terms 2/10, n/30. 28 Paid invoice of August 15 in full

Solution

Date Accounting titles & Explanations Debit Credit 10-Aug purchase 30772 Accounts payable (31,400*98%) 30,772 13-Aug Accounts payable (1500*98%) 1470 Purchase returns & allowance 1,470 15-Aug purchase 35838 Accounts payable (36,200*99%) 35,838 25-Aug purchase 41748 Accounts payable (42600*98%) 41,748 28-Aug Accounts payable 35,838 purchase discount los 362 cash 36,200