Purchase-Related Transactions Journalize entries for the following related trans

Question

Purchase-Related Transactions

Journalize entries for the following related transactions of Manville Heating & Air Company:

a. Purchased $39,000 of merchandise from Wright Co. on account, terms 1/10, n/30.

b. Paid the amount owed on the invoice within the discount period.

c. Discovered that $7,800 of the merchandise purchased in (a) was defective and returned items, receiving credit.

d. Purchased $6,300 of merchandise from Wright Co. on account, terms n/30.

e. Received a refund from Wright Co. for return in (c) less the purchase in (d).

Explanation / Answer

a Merchandise inventory $ 39,000 Accounts payable - Wright Co $ 39,000 b Accounts payable - Wright Co $ 39,000 Purchase discount ($39,000*1%) $        390 cash $ 38,610 c Accounts payable - Wright Co $    7,800 Merchandise inventory $    7,800 d Merchandise inventory $    6,300 Accounts payable - Wright Co $    6,300 e cash ($7,800-$6,300-$78) $    1,422 Purchase discount - ($7,800*1%) $          78 Accounts payable - Wright Co $    1,500

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