E5-1 Journalize purchase transactions. (LO 2), AP This information relates to Ri
ID: 2544843 • Letter: E
Question
E5-1 Journalize purchase transactions. (LO 2), AP This information relates to Rice Co. .1.0n April 5, purchased merchandise from Jax Com- pany for $28,000, terms 2/10, n/30. 2.0n April 6, paid freight costs of $700 on merchandise purchased from Jax. . 3.0n April 7, purchased equipment on account for $30,000. 4.0n April 8, returned $3,600 of April 5 merchandise to Jax Company. 5.0n April 15, paid the amount due to Jax Company in Instructions Prepare the journal entries to record the transactions listed above on Rice Co.'s books. Rice Co. uses a perpet- ual inventory system. Assume that Rice Co. paid the balance due to Jax Com- pany on May 4 instead of April 15. Prepare the journal entry to record this payment.Explanation / Answer
Perpetual inventory system
Date
Particulars
Debit
credit
Apr-05
Inventory
$28,000
Accounts Payable
$28,000
(Being merchandise purchase)
Apr-06
Inventory
$700
cash
$700
(Freight costs paid)
Apr-07
Equipment
$30,000
Accounts Payable
$30,000
(Being equipment purchase)
Apr-08
Accounts Payable
$3,600
Inventory
$3,600
(Being goods returned)
Apr-15
Accounts Payable (28000-3600)
$24,400
Cash
$23,912
inventory ($24400*2%)
$488
Paid the amount due to frost company in full
Date
Particulars
Debit
credit
May-04
Accounts Payable
24400
cash
24400
Perpetual inventory system
Date
Particulars
Debit
credit
Apr-05
Inventory
$28,000
Accounts Payable
$28,000
(Being merchandise purchase)
Apr-06
Inventory
$700
cash
$700
(Freight costs paid)
Apr-07
Equipment
$30,000
Accounts Payable
$30,000
(Being equipment purchase)
Apr-08
Accounts Payable
$3,600
Inventory
$3,600
(Being goods returned)
Apr-15
Accounts Payable (28000-3600)
$24,400
Cash
$23,912
inventory ($24400*2%)
$488
Paid the amount due to frost company in full
Date
Particulars
Debit
credit
May-04
Accounts Payable
24400
cash
24400
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