Question

The following transactions are from Sharper Vision Corporation.

1. Purchased inventory on December 10, 2020, with a list price of $6,000, a trade discount of 20%, and with terms 2/10, n/30.
2. Returned $800 of inventory to the supplier on December 15, 2020.
3. Paid $3,200 cash on account on December 19, 2020.
4. Paid the remaining balance on January 5, 2021.

• Perpetual inventory systems
• Periodic inventory systems

a. Prepare journal entries for the transactions 1 through 4, assuming that the company uses the perpetual inventory system and the net method to record purchases. Include any adjusting entry required on December 31, 2020.
Note: Round answers to the nearest dollar.

Date	Account Name	Dr.	Cr.
Dec. 10, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
Dec. 15, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
Dec. 19, 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
Dec. 31. 2020	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	To record adjusting entry for interest.
Jan. 5, 2021	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer
	AnswerCashAccounts ReceivableInventoryAllowance to Reduce FIFO Inventory to LIFO BasisAccounts PayableDeferred RevenueSales RevenueCost of Goods SoldFreight-inPurchasesPurchase DiscountsPurchase Returns and AllowancesInterest ExpenseN/A	Answer	Answer

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Answer 1

Answer
Note: Round answers to the nearest dollar.
Date	Account Name	Dr.	Cr.
Dec. 10, 2020	Inventory	$         4,704
	Accounts Payable(=6000*80%*98%)		$          4,704
Dec. 15, 2020	Accounts Payable (=800*80%*98%)	$            627
	Inventory		$             627
Dec. 19, 2020	Accounts Payable	$         3,200
	Cash		$          3,200
Dec. 31. 2020	Inventory (=877/98%*2%)	$              18
	Accounts Payable		$               18
	To record adjusting entry for interest.
Jan. 5, 2021	Accounts Payable	$            895
	Cash		$             895