his information relates to Crisp Co. (Credit account titles are automatically in

Question

his information relates to Crisp Co. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)

1. On April 5, purchased merchandise from Frost Company for $26,500, terms 3/10, n/30. 2. On April 6, paid freight costs of $610 on merchandise purchased from Frost. 3. On April 7, purchased equipment on account for $31,400. 4. On April 8, returned $4,800 of April 5 merchandise to Frost Company. 5. On April 15, paid the amount due to Frost Company in full.

Explanation / Answer

a) Journal entries

1) April 5

Merchandise Dr $ 26,500

Frost Company Cr $ 26,500

2) April 6

Frieght expenses Dr $ 610

Cash Cr $610

3) April 7

Equipment Dr $ 31,400

Account payable Cr $ 31,400

4) April 8

Frost Company dr $ 4,800

merchandise Cr $ 4,800

5) April 15

Frost Company Dr $ 21,700 ( $ 26,500 - $ 4,800)

Cash Cr $ 21,049

discount Cr $ 651 ( $ 21,700 X 3%)

Discount of 3% as payment made within 10days

B) Journal Entry

Frost Company Dr $ 21,700

Cash Cr $ 21,700

No discount as payment made beynd 10 days

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