Question

Warwick's Co., a women's clothing store, purchased $21,000 of merchandise from a supplier on account, terms FOB destination, 1/10, 1/30. Warwick's returned $3,600 of the merchandise, receiving a credit memo. 

a. Journalize Warwick's Co.'s entry to record the purchase. 

b. Journalize Warwick's Co.'s entry to record the merchandise return. 

c. Journalize Warwick's Co. entry to record the payment within the discount period of ten days. 

d. Journalize Warwick's Co. entry to record the payment beyond the discount period of ten days. 

Answer 1

(a)	Purchases A/c                                      Dr	$         21,000.00
	To Accounts payable A/c		$        21,000.00
(b)	Accounts Payable A/c                   Dr	$            3,600.00
	To Purchase return a/c		$          3,600.00
( c)	Accounts payable A/c                  Dr	$         17,400.00
	To Cash A/c		$        17,226.00
	To Discount A/c		$              174.00
(d)	Accounts payable A/c	$         17,400.00
	To Cash A/c		$        17,400.00