Prepare journal entries to record each of the following tran

Prepare journal entries to record each of the following transactions of a merchandising company os 4-5 Recording purchases company uses a perpetual inventory system and the gross method. etums, and discounts taken Now. Purchased 600 units of product at a cost of $10 per unit. Terms of the sale are 2/10, n/60 the invoice is dated November 5 Returned 25 defective units from the November 5 purchase and received full credit. Paid the amount due from the November 5 purchase, less the return on November 7. P1 7 15

Solution

05-Nov Merchandise inventory 6000 (600*10)                Accounts payable 6000 07-Nov Accounts payable 250 (25*10)                Merchandise inventory 250 15-Nov Accounts payable 5750               Cash 5635 (5750*98%)               Discount received 115 (5750*2%)