PURCHASES AND PURCHASES RETURNS. On November 6, Lubin Products purchased on credit 350 parts kits from Michaels Electronics for $38 per kit. Michaels paid $320 to have the kits shipped to Lubin. Lubin paid for the kits on December 1.

On December 15, Lubin discovered that 4 kits were defective and returned them to Michaels for full credit against future purchases. Lubin uses the periodic method of accounting for inventory. LO6 REQUIRED:

1. Prepare an entry for Lubin’s journal to record the November 6 purchase.

2. Would Lubin record the cost of shipping paid by Michaels?

3. Prepare an entry for Lubin’s journal to record the December 1 payment.

4. Prepare an entry for Lubin’s journal to record the December 15 purchase return.