Under a perpetual inventory system, record the journal entries for the purchase

Question

Under a perpetual inventory system, record the journal entries for the purchase transactions below. Omit explanations. July 5: Soho Company purchased merchandise on account from a supplier for $5,700, terms FOB destination, 2/10, net 30. July 10: $700 of the merchandise purchase on July 5 was returned. July 15: Paid for the merchandise purchased on July 5, within the discount period. July 25: Purchased merchandise, $10,000, terms FOB shipping point, 2/15, n/30, with prepaid freight charges of $525 added to the invoice. Aug. 9: Paid for the merchandise purchased on July 25, within the discount period. ?

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit July 5 Merchandise inventory 5700 Account payable 5700 (To record purchase) July 10 Account payable 700 Merchandise inventory 700 (To record merchandise return) July 15 Account payable 5000 Cash (5000*98%) 4900 Merchandise inventory 100 (To record amount paid) July 25 Merchandise inventory 10525 Account payable 10000 Cash 525 (To record merchandise purchase) Aug 9 Account payable 10000 Cash 9800   Merchandise inventory 200 (To record amount paid)

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