Purchase-Related Transactions Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $23,500, terms n/30. The cost of the merchandise sold is $14,100. Showcase Co. issues a credit memo for $4,200 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $2,500. a. Journalize Balboa Co.'s entry for the purchase. b. Journalize Balboa Co.'s entry for the return of the merchandise for credit. c. Journalize Balboa Co.'s entry for the payment of the invoice.

Question

Business

Paula Holloway

23 June, 00:08

Purchase-Related Transactions Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $23,500, terms n/30. The cost of the merchandise sold is $14,100. Showcase Co. issues a credit memo for $4,200 for merchandise returned prior to Balboa Co. paying the original invoice. The cost of the merchandise returned is $2,500. a. Journalize Balboa Co.'s entry for the purchase. b. Journalize Balboa Co.'s entry for the return of the merchandise for credit. c. Journalize Balboa Co.'s entry for the payment of the invoice.

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Yesenia Patel · Answer 1

The journal entries are shown below:

a. Inventory Dr $23,500

To Account payable $23,500

(Being inventory purchased on credit)

b. Account payable Dr $4,200

To Purchase return $4,200

(Being the return of the inventory is recorded)

c. Account payable Dr $19,300

To Cash $19,300

(Being the payment of the invoice is recorded)