Homework SourseApr 2 Purchased 3600 of merchandise from Lyon Company with c
Apr. 2 Purchased $3,600 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
3 Paid $202 cash for shipping charges on the April 2 purchase.
4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $550.
17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
18 Purchased $7,900 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 $500 allowance toward the $7,900 owed on the April 18 purchase.
28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.
Prepare journal entries to record each of the above merchandising transactions assuming that the buyer uses the periodic inventory system and the gross method.
Solution
Journal entries :
| Date | accounts & explanation | debit | credit |
| Apr 2 | Purchase | 3600 | |
| account payable-Lyon company | 3600 | ||
| (To record merchandise purchase) | |||
| April 3 | Freight-in | 202 | |
| Cash | 202 | ||
| (To record shipping charges paid ) | |||
| April 4 | Account payable-Lyon company | 550 | |
| Purchase return | 550 | ||
| (To record purchase return) | |||
| Apr 17 | Account payable-Lyon company | 3050 | |
| Bank (3050*98%) | 2989 | ||
| Purchase discount (3050*2%) | 61 | ||
| (To record amount paid) | |||
| Apr 18 | Purchase | 7900 | |
| Account payable-Frist corp. | 7900 | ||
| (To record merchandise purchase) | |||
| Apr 21 | Account payable-Frist corp. | 500 | |
| Purchase allowance a/c | 500 | ||
| (To record purchase allowance received) | |||
| Apr 28 | Account payable-Frist corp. | 7400 | |
| Bank (7400*99%) | 7326 | ||
| Purchase discount (7400*1%) | 74 | ||
| (To record amount paid) |
