Question

Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
  

Apr.		2		Purchased $3,300 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
		3		Paid $240 cash for shipping charges on the April 2 purchase.
		4		Returned to Lyon Company unacceptable merchandise that had an invoice price of $800.
		17		Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
		18		Purchased $5,900 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
		21		After negotiations, received from Frist a $500 allowance toward the $5,900 owed on the April 18 purchase.
		28		Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Answer 1

Journal entry :

Date	account and explanation	debit	credit
Apr 2	Merchandise inventory	3300
	Account payable		3300
	(To record purchase)
Apr 3	Merchandise inventory	240
	Cash		240
	(To record shipping charge)
Apr 4	Account payable	800
	Merchandise inventory		800
	(To record purchase return)
Apr 17	Account payable (3300-800)	2500
	Cash (2500*98%)		2450
	Merchandise inventory		50
	(To record amount paid)
Apr 18	Merchandise inventory	5900
	Account payable		5900
	(To record purchase)
Apr 21	Account payable	500
	Merchandise inventory		500
	(To record purchase allowance)
Apr 28	Account payable (5900-500)	5400
	Cash (5400*99%)		5346
	Merchandise inventory		54
	(To record amount paid)