PurchaseRelated Transactions Showcase Co a furniture wholesa

Purchase-Related Transactions Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $254,500, terms n/30. The cost of the merchandise sold is $152,700. Showcase Co. issues a credit memo for $30,000 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $17,500 a. Journalize Balboa Co.\'s entry for the purchase. b. Journalize Balboa Co.\'s entry for the return of the merchandise for credit. Journalize Balboa Co.\'s entry for the payment of the invoice.

Solution

a Merchandise inventory 254500        Accounts Payable-Showcase Co. 254500 b Accounts Payable-Showcase Co. 30000        Merchandise inventory 30000 c Accounts Payable-Showcase Co. 224500       Cash 224500