Answer:
Debit: Accounts Payable $ 5,000
Credit: Merchandise Inventory $ 5,000
Step-by-step explanation:
Credit note:
A credit note is a document issued by the supplier, when:
- Supplies are returned or found to be deficient by the recipient -
- When goods supplied are returned by the recipient or goods/services supplied are found to be deficient by the recipient, the supplier should issue a Credit Note.
- The credit note serves the purpose of reducing the value of the original supply.
Preparing journal entries with respect the given situation.
Debit: Accounts Payable $ 5,000
Credit: Merchandise Inventory $ 5,000