Question

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.

Answer 1

Journal entries

Date	Account and explanation	Debit	Credit
Apr 2	Purchase	3600
	Account payable		3600
	(To record purchase)
Apr 3	Freight in	202
	Cash		202
	(To record freight paid)
Apr 4	Account payable	550
	Purchase return and allowance		550
	(To record purchase return)
Apr 17	Account payable (3600-550)	3050
	Cash		2989
	Purchase discount		61
	(To record amount paid)
Apr 18	Purchase	7900
	Account payable		7900
	(To record purchase)
Apr 21	Account payable	500
	Purchase return and allowance		500
	(To record purchase return and allowance)
Apr 28	Account payable	7400
	Cash		7326
	Purchase discount		74
	(To record amount paid)