Question

Journalize entries for the following related transactions of Manville Heating & Air Company. Refer to the Chart of Accounts for exact wording of account titles.

Mar. 1 Purchased $90,000 of merchandise from Wright Co. on account, terms 2/10, n/30.
Mar. 9 Paid the amount owed on the invoice within the discount period.
Mar. 11 Discovered that $18,000 of the merchandise purchased on March 1 was defective and returned items, receiving credit for $17,640 [$18,000 − ($18,000 × 2%)].
Mar. 18 Purchased $10,000 of merchandise from Wright Co. on account, terms n/30.
Mar. 20 Received a refund from Wright Co. for return on Mar. 11 less the purchase on Mar. 18.

Answer 1

Answer:

See explanation section.

Explanation:

March 1,   Purchased     Debit      $90,000

Accounts payable        Credit     $90,000

Note: To record the purchased on account.

March 9,   Accounts payable   Debit  $90,000

Cash                                           Credit  $88,200

Purchased discount                  Credit  $1,800

Calculation: $90,000  - ($90,000 × 2%) = $88,200

Note: To record the payment.

March 11,       No journal entry required.

March 18,    Purchased     Debit   $10,000

Accounts payable             Credit  $10,000

Note: To record the purchased on account.

March 20,   Cash    Debit    $17,640

Refunds payable  Credit    $17,640

Note: To record the return.