Prepare journal entries for July, 2011 to record the following transactions for
ID: 2383751 • Letter: P
Question
Prepare journal entries for July, 2011 to record the following transactions for Seaside Sales. Assume a perpetual inventory system.Enter the transaction letter as the description. Also, the dates must be entered in the format dd/mmm (ie. 15/Jan).
a.July 3: Seaside Sales purchased merchandise on credit from Resource Product Co., terms 2/10, n/30, $7,400, FOB destination.
b.July 7: After negotiations with Resource Product Co. concerning problems with the merchandise purchased on July 3, received a credit memorandum granting a price reduction of $3,700.
c.July 14: Seaside Sales paid $700 for supplies purchased today.
d.July 21: Seaside Sales purchased merchandise on credit from Beamer Co., terms 2/15, n/60, $6,100, FOB destination.
e.July 24: Paid the amount due to Resource Product Co. for the July 3 purchase.
f.July 31: Paid the balance due to Beamer Co..
Explanation / Answer
a.July 3: Seaside Sales purchased merchandise on credit from Resource Product Co., terms 2/10, n/30, $7,400, FOB destination.
03/Jul
Debit: Merchandise Inventory 7,400
Credit: Accounts Payable 7,400
b.July 7: After negotiations with Resource Product Co. concerning problems with the merchandise purchased on July 3, received a credit memorandum granting a price reduction of $3,700.
07/Jul
Debit: Accounts Payable 3,700
Credit: Merchandise Inventory 3,700
c.July 14: Seaside Sales paid $700 for supplies purchased today
14/Jul
Debit: Supplies 700
Credit: Cash 700
.
d.July 21: Seaside Sales purchased merchandise on credit from Beamer Co., terms 2/15, n/60, $6,100, FOB destination.
21/Jul
Debit: Merchandise Inventory 6,100
Credit Accounts Payable 6,100
e.July 24: Paid the amount due to Resource Product Co. for the July 3 purchase.
24/Jul
Debit: Accounts payable 3,700
Credit: Cash 3,700
f.July 31: Paid the balance due to Beamer Co..
Debit: Accounts Payable 6,100
Credit: Merchandise Inventory 122
Credit: Cash 5978
(They paid this within 15 days, so they get a 2% discount)