Question

Record the following transactions related to purchases for Horston’s Art Supplies using the general journal form provided below. Assume Horston’s uses a periodic inventory system. Omit transaction descriptions from entries.
Date Transaction
Sept. 1 Purchased $8,000 of merchandise on account, FOB destination, n/30.
3 Returned $1,000 of merchandise purchased on September 1 due to defects.
7 Purchased $1,500 of merchandise on account, terms FOB shipping point, 2/10, n/30.
Prepaid freight of $75 was added to the invoice.
14 Paid for the merchandise purchased on September 7, less discount.
20 Paid for merchandise purchased on September 1, less return.

Answer 1

Answer:

Sept. 1

Merchandise $8,000 (debit)

Accounts Payable $8,000 (credit)

Merchandise purchased on credit

Sept. 3

Accounts Payable $1,000 (debit)

Merchandise $1,000 (credit)

Merchandise Returned to Suppliers

Sept. 7

Merchandise $1,500 (debit)

Accounts Payable $1,500 (credit)

Merchandise purchased on credit

Sept. 14

Accounts Payable $1,500 (debit)

Cash $1,470 (credit)

Discount received $30 (credit)

Payment of amounts due and recognition of cash discount

Sept. 20

Accounts Payable $7,000 (debit)

Cash (credit)

Payments of Amount due

Explanation:

Journal Entries and their narrations have been prepared above.