Question

The following transactions occurred during the month of October for Bella Boutique.

Oct. 1	Sold merchandise on credit for $2,000, terms 2/10, n/30. The items sold had a cost of $1,500.
3	Purchased merchandise for cash, $720.
4	Purchased merchandise on credit for $1,600, terms 3/20, n/30.
5	Issued a credit memorandum for $1,000 to a customer who returned merchandise purchased July 20. The returned items had a cost of $510.
10	Received payment for merchandise sold October 1.
15	Received a credit memorandum from the seller for the return of faulty merchandise purchased on October 4 for $600.
18	Paid freight charges of $200 for merchandise ordered last month. (FOB shipping point)
23	Paid for the merchandise purchased October 4 less the portion that was returned.

Required:

Prepare the general journal entries to record these transactions.  

Answer 1

Perpetual Inventory System is assumed

Date	Account Titles	Debit	Credit
Oct. 1	Accounts Receivable	$           2,000
	Sales Revenue		$           2,000
	Cost of Goods Sold	$           1,500
	Inventory		$           1,500
Oct. 3	Inventory	$              720
	Cash		$              720
Oct. 4	Inventory	$           1,600
	Accounts Payable		$           1,600
Oct. 5	Sales Returns and Allowances	$           1,000
	Accounts Receivable		$           1,000
	Inventory	$              510
	Cost of Goods Sold		$              510
Oct. 10	Cash	$           1,960
	Sales Discount	$                40
	Accounts Receivable		$           2,000
Oct. 15	Accounts Payable	$              600
	Inventory		$              600
Oct. 18	Inventory	$              200
	Cash		$              200
Oct. 23	Accounts Payable	$           1,000
	Inventory		$                30
	Cash		$              970