Question

Issued a credit memo for returned merchandise that was sold for $10,400 terms n/30. The cost of merchandise returned was $6,500.

Answer 1

Date	Account Titles and Explanation	Debit (in $)	Credit (in $)
1	Sales Returns and Allowances	$ 10,400
	Accounts Receivable		$ 10,400
	(To record the issue of Credit memo)
	Merchandise Inventory	$ 6,500
	Cost of Goods sold		$ 6,500
	(To record the inventory return at Cost )