Journalize the following transactions for the buyer Davis Co

Journalize the following transactions for the buyer, Davis Company, using the gross method to account for purchase discounts Assume a perpetual inventory system April 5 Purchased merchandise from Coleman Company on account, $11,000, terms 5/10, n/30. The goods are shipped FOB April 11 Returned to Coleman Company merchandise previously purchased on account, $600 shipping point, freight prepaid by seller, $250 April 15 Paid the amount due to Coleman Company Date Account Title Debit Credit (Choose one) (Choose one) Accounts Payable Accounts Receivable Cash Cost of Goods Sold Discounts Lost Freight Out Merchandise Inventory Prepaid Rent Rent Expense Sales Sales Discounts Sales Returns and Allowances Supplies Supplies Expense Clear Undo Help I don\'t know

Solution

Date Journal Entry Debit Credit Apr-05 Merchandise Inventory a/c 11250 To Accounts Payable -Coleman Company 11250 (To record purchase at 11250 [11000+250] , including FOB shipping point) Apr-11 Accounts Payable -Coleman Company 600 To Merchandise Inventory a/c 600 (To record return of inventory) Apr-15 Accounts Payable -Coleman Company 10650 To Cash 10118 To Merchandise Inventory 532 (To record payment to Coleman company [11250-600] *95% , 5 % being discount)