Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

Exercise 4-3 Recording purchases, purchases returns, and purchases allowances LO P1

Prepare journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.

 
Apr.           2           Purchased $5,100 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
            3           Paid $310 cash for shipping charges on the April 2 purchase.
            4           Returned to Lyon Company unacceptable merchandise that had an invoice price of $750.
            17           Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
            18           Purchased $9,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
            21           After negotiations, received from Frist a $500 allowance toward the $9,500 owed on the April 18 purchase.
            28           Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.

Explanation
Apr.           17:           Cash paid within discount period less returns = [($5,100 − $750) × (100% − 2%)] = $4,263.
Apr.           28:           Cash paid balance within discount period = [($9,500 − $500) × (100% − 1%)] = $8,910.

Thank you!