Answer:
April 5, purchased merchandise on account terms 2/10, n/10
Dr Merchandise inventory 22,000
Cr Accounts payable 22,000
April 6, paid freight costs
Dr Merchandise inventory 900
Cr Cash 900
April 7, purchase equipment on account
Dr P, P & E - Equipment 26,000
Cr Accounts receivable 26,000
April 8, returned some merchandise (April 5th purchase)
Dr Accounts payable 2,000
Cr Merchandise inventory 2,000
April 15, paid merchandise invoice
Dr Accounts payable 20,000
Cr Cash 19,600
Cr Purchase discounts 400
or
May 4, paid merchandise invoice
Dr Accounts payable 20,000
Cr Cash 20,000
If the company pays the invoice on April 15th, it will get a 2% discount which must be recorded as a purchase discount.
The journal entry for all the given transactions should be shown below that include the payment related to freight, equipment on credit, etc
1.
Dr Merchandise inventory 22,000
Cr Accounts payable 22,000
2.
Dr Merchandise inventory 900
Cr Cash 900
3.
Dr P, P & E - Equipment 26,000
Cr Accounts receivable 26,000
4.
Dr Accounts payable 2,000
Cr Merchandise inventory 2,000
5.
Dr Accounts payable 20,000
Cr Cash 19,600
Cr Purchase discounts 400
or
Dr Accounts payable 20,000
Cr Cash 20,000
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