Question

Assuming that purchases are recorded at net amounts and that discounts lost are treated as financial expenses: Prepare general journal entries to enter the transactions.

Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method.

August 10		Purchased merchandise on account, $31,400, terms 2/10, n/30.
13		Returned part of the purchase of August 10, $1,500, and received credit on account.
15		Purchased merchandise on account, $36,200, terms 1/10, n/60.
25		Purchased merchandise on account, $42,600, terms 2/10, n/30.
28		Paid invoice of August 15 in full

Answer 1

Date	Accounting titles & Explanations					Debit	Credit
10-Aug	purchase					30772
	Accounts payable (31,400*98%)						30,772
13-Aug	Accounts payable (1500*98%)					1470
	Purchase returns & allowance						1,470
15-Aug	purchase					35838
	Accounts payable (36,200*99%)						35,838
25-Aug	purchase					41748
	Accounts payable (42600*98%)						41,748
28-Aug	Accounts payable					35,838
	purchase discount los					362
	cash						36,200