Question

On March 9, Modern Kitchens, a retail store, received Credit Memorandum 244 for $3,420 from J & M Appliance Corporation. The credit memorandum covered a return of damaged trash compactors originally purchased on Invoice 4101 dated February 3. Prepare the general journal entry that Modern Kitchens would make for this transaction.

Record for the credit memo received for damaged merchandise.

Note: Enter debits before credits.

	Date General Journal Debit Credit March 09, 2019

Answer 1

• Modern Kitchen has received the credit memo from J & M
• This means that J & M has credited Modern kitchen in their books.
• Modern Kitchen will hence debit them in its books.
• The journal can used two alternatives ways depending upon method of accounting inventory being used:

---If Periodic Inventory system is used:

Date	General Journal	Debit	Credit
09-Mar-19	Accounts Payable – [J & M Appliance Corp]	$              3,420.00
	Purchase Return & Allowances		$             3,420.00
	(credit received of merchandise return)

---If Perpetual Inventory system is being used:

Date	General Journal	Debit	Credit
09-Mar-19	Accounts Payable – [J & M Appliance Corp]	$              3,420.00
	Inventory		$             3,420.00
	(credit received of merchandise return)