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Prepare journal entries to record the following transactions for a retail store
Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory
system.
Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600 price, invoice
dated April 2, credit terms of 2y15, ny60, and FOB shipping point.
3 Paid $300 for shipping charges on the April 2 purchase.
4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.
17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned
merchandise.
18 Purchased merchandise from Frist Corp. under the following terms: $8,500 price, invoice dated
April 18, credit terms of 2y10, ny30, and FOB destination.
21 After negotiations, received from Frist a $1,100 allowance on the April 18 purchase.
28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance.
Expert Solution
Answer:
| Date | Account Title | Debit | Credit |
| 2.April | Purchase | 4600 | |
| Accounts Payable | 4600 | ||
| 3.April | Freight Inward | 300 | |
| Cash | 300 | ||
| 4.April | Accounts Payable | 600 | |
| Purchase Return | 600 | ||
| 17.April | Accounts Payable | 4000 | |
| Discount Received | 80 | ||
| Cash | 3920 | ||
| 18.April | Purchase | 8500 | |
| Accounts Payable | 8500 | ||
| 21.April | Accounts Payable | 1100 | |
| Allowance Received | 1100 | ||
| 28.April | Accounts Payable | 7400 | |
| Discount Received | 148 | ||
| Cash | 7252 |
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