Lee Ltd. has the following selected transactions during October:
Oct. 2 Purchased equipment on account costing $13,200 from Lifelong Inc.
5 Received credit memorandum for $720 from Lyden Company for merchandise returned that had been damaged in shipment to Lee.
7 Issued a credit memorandum for $600 to M. Presti for merchandise the customer returned. The returned merchandise has a cost of $375 and was restored to inventory.
Lee Ltd. uses a purchases journal, a sales journal, two cash journals (receipts and payments), and a general journal. Lee also uses a perpetual inventory system.
Instructions
(a) Record the appropriate transactions in the general journal. If a transaction should be recorded in one of the special journals indicate the name of that journal.
(b) Assume now that Lee Ltd. uses a periodic inventory system. Record the appropriate transactions in the general journal.
(c) In a brief memo to the president of Lee Ltd., explain the postings to the control and subsidiary accounts.