Question

Baymont Corporation purchased inventory on account on March 3, 2017, for a gross price of $50,000. The company purchased additional inventory on account on March 10, 2017, for a gross price of $140,000. Baymont Corporation paid for the frst purchase on April 25, 2017, and for the second purchase on March 20, 2017. The company prepares monthly adjusting journal entries and uses the perpetual inventory method. Prepare journal entries for each transaction.

Answer 1

Baymont Corporation

Journal Entries:

March 3, 2017: Debit Inventory $50,000

Credit Accounts payable $50,000

To record the purchase of goods on account.

March 10, 2017: Debit Inventory $140,000

Credit Accounts payable $140,000

To record the purchase of goods on account.

March 20, 2017: Debit Accounts payable $140,000

Credit Cash $140,000

To record the payment for goods purchased on account.

April 25, 2017: Debit Accounts payable $50,000

Credit Cash $50,000

To record the payment for goods purchased on account.

Step-by-step explanation:

a) Data and Analysis:

March 3, 2017: Inventory $50,000 Accounts payable $50,000

March 10, 2017: Inventory $140,000 Accounts payable $140,000

March 20, 2017: Accounts payable $140,000 Cash $140,000

April 25, 2017: Accounts payable $50,000 Cash $50,000