Question

Journalize entries for the following related transactions of Lilly Heating & Air Company: Purchased $34,000 of merchandise from Schell Co. on account, terms 1/10, n/30. Paid the amount owed on the invoice within the discount period. Discovered that $6,800 before purchases discount of the merchandise was defective and returned items, receiving credit. Purchased $5,100 of merchandise from Schell Co. on account, terms n/30. Received a check for the balance owed from the return in (c), after deducting for the purchase in (d).

Answer 1

Journal Entries:
S.no.	Accounts title and explanations				Debit $	Credit $
1	Merchandise Inventory Dr.				34000
	Accounts payable					34000
2	Accounts payable Dr.				34000
	Cash account (34000*99%)					33660
	Merchandise Inventory (34000*1%)					340
3	Accounts payable Dr. (6800*99%)				6,732
	Merchandise Inventory					6732
4	Merchandise Inventory Dr.				5100
	Accounts payable					5100
5	Cash account Dr.				1,632
	Accounts payable					1632