Purchased 600 units of product at a cost of $10 per unit. Terms of the sale are
ID: 2402739 • Letter: P
Question
Purchased 600 units of product at a cost of $10 per unit. Terms of the sale are 2/10, n/60; the invoice is dated November 5.
Prepare journal entries to record each of the merchandising transactions assuming that the PERIODIC inventory system is used.
Nov. 5Purchased 600 units of product at a cost of $10 per unit. Terms of the sale are 2/10, n/60; the invoice is dated November 5.
Nov. 7 Returned 25 defective units from the November 5 purchase and received full credit. Nov. 15 Paid the amount due from the November 5 purchase, less the return on November 7.Explanation / Answer
Journal entry ;
Date account & explanation debit credit Nov 5 Purchase 6000 Account payable 6000 (To record purchase) Nov 7 Account payable (25*10) 250 Purchase return and allowance 250 (To record purchase return) Nov 15 Account payable (6000-250) 5750 Cash (5750*98%) 5635 Purchase discount 115 (To record amount paid)