Bowden Company (buyer) and Song, Inc. (seller), engaged in the following transactions during January 2019:

Bowden Company

DATE TRANSACTIONS

2019

Jan. 8 Issued Check 2101 for $2,940 on account to Song, Inc., in payment of Invoice 1885 dated December 30, 2018, less cash discount of $60.

10 Purchased merchandise for $3,500 from Song, Inc., Invoice 1920; terms 2/10, n/30.

15 Received Credit Memorandum 320 from Song, Inc., for damaged merchandise totaling $300 that was returned; the goods were purchased on Invoice 1920, dated January 10.

19 Paid amount due to Song, Inc., for Invoice 1920 of January 10, less the return of January 15 and less the cash discount, Check 2130.

30 Purchased merchandise for $4,400 from Song, Inc., Invoice 1950; terms 2/10, n/30.

Song, Inc.

DATE TRANSACTIONS

2019

Jan. 8 Received payment of $2,940 on account from Bowden Company in payment of Invoice 1885 dated December 30, 2018, less cash discount of $60.

10 Sold merchandise for $3,500 on account to Bowden Company, Invoice 1920, terms 2/10, n/30.

15 Issued Credit Memorandum 320 to Bowden Company for damaged merchandise totaling $300 that was returned; the goods were purchased on Invoice

1920, dated January 10.

19 Received payment from Bowden Company for Invoice 1920 of January 10, less the return of January 15 and less the cash discount.

30 Sold merchandise for $4,400 to Bowden Company, Invoice 1950; terms 2/10, n/30.

INSTRUCTIONS

1. Open the accounts payable ledger account and accounts receivable ledger account indicated below for both Bowden Company and Song, Inc. Enter the balances as of January 1, 2019.

2. Journalize the transactions above in a general journal for both Bowden Company and Song,

Inc. Begin the journals for both companies with page 21.

3. Post the transactions to the appropriate accounts in the general ledger and the accounts payable subsidiary ledger for Bowden Company.

4. Post the transactions to the appropriate accounts in the general ledger and the accounts receivable subsidiary ledger for Song, Inc.

GENERAL LEDGER ACCOUNTS-BOWDEN COMPANY

201 Accounts Payable, $3,000 Cr.

ACCOUNTS PAYABLE LEDGER ACCOUNT-BOWDEN COMPANY

Song, Inc., $3,000

GENERAL LEDGER ACCOUNTS-SONG, INC.

111 Accounts Receivable, $3,000 Dr.

ACCOUNTS RECEIVABLE LEDGER ACCOUNT-SONG, INC.

Bowden Company, $3,000

Analyze:

What is the balance of the accounts payable for Song, Inc., in the Bowden Company accounts payable subsidiary ledger? What is the balance of the accounts receivable for Bowden Company in the Song, Inc., accounts receivable subsidiary ledger?