Question

Record journal entries for the following transactions of Furniture Warehouse.

July 5: Purchased 30 couches at a cost of $150 each from a manufacturer. Credit terms are 2/15, n/30, invoice date July 5.
July 10: Furniture Warehouse returned 5 couches for a full refund.
July 15: Furniture Warehouse found 6 defective couches, but kept the merchandise for an allowance of $500.
July 20: Furniture Warehouse paid their account in full with cash.

Answer 1

To record the journal entries for Furniture Warehouse's transactions, you need to follow the double-entry bookkeeping system. Here are the journal entries for each transaction: July 5 - Debit Purchases (Inventory) and Credit Accounts Payable, July 10 - Debit Accounts Payable and Credit Purchases Returns & Allowances, July 15 - Debit Purchases (Inventory) and Credit Accounts Payable, and July 20 - Debit Accounts Payable and Credit Cash.

Step-by-step explanation:

To record the journal entries for the transactions of Furniture Warehouse, we need to follow the double-entry bookkeeping system. Here are the journal entries for each transaction:

1. July 5: Debit Purchases (Inventory) for $4,500 and Credit Accounts Payable (due in 30 days) for $4,500.
2. July 10: Debit Accounts Payable for $750 and Credit Purchases Returns & Allowances for $750.
3. July 15: Debit Purchases (Inventory) for $3,000 and Credit Accounts Payable for $3,000.
4. July 20: Debit Accounts Payable for $8,250 and Credit Cash for $8,250.