Question

Purchase-Related Transactions

Journalize entries for the following related transactions of Manville Heating & Air Company:

a. Purchased $39,000 of merchandise from Wright Co. on account, terms 2/10, n/30.

b. Paid the amount owed on the invoice within the discount period.

c. Discovered that $7,800 of the merchandise purchased in (a) was defective and returned items, receiving credit.

d. Purchased $6,100 of merchandise from Wright Co. on account, terms n/30.

e. Received a refund from Wright Co. for return in (c) less the purchase in (d).

Answer 1

a. Purchased $39,000 of merchandise from Wright Co. on account, terms 2/10, n/30.

a	Purchase	38220
	Account payable-Wright Co		38220

b. Paid the amount owed on the invoice within the discount period.

b	Account payable-Wright Co (39000*98%)	38220
	Cash		38220

c. Discovered that $7,800 of the merchandise purchased in (a) was defective and returned items, receiving credit.

c	Account payable-Wright Co (7800*98%)	7644
	Purchase return and allowance		7644

d. Purchased $6,100 of merchandise from Wright Co. on account, terms n/30.

d	Purchase	6100
	Account payable-Wright Co		6100

e. Received a refund from Wright Co. for return in (c) less the purchase in (d).

e	Cash (7800-6100)	1700
	Account payable-Wright Co		1700