Question

Juniper Company, Inc. uses a perpetual inventory system. The company purchased $9,750 of merchandise on August 7 with terms 1/10, n/30. On August 11, it returned $1,500 worth of merchandise. On August 26, it paid the full amount due. The correct journal entry to record the merchandise return on August 11 is:

Answer 1

Answer and Explanation:

The journal entry is shown below:

Accounts payable $1,500

To Merchandise Inventory $1,500

(being purchase returns is recorded)

here account payable is debited as it decreased the liabilities and credited the merchandise inventory as it decreased the assets