1st question

Franks Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.

Franks Company sold on account $2,500 of merchandise to Brads Company on May 2, 2016. Selling price was $4,000. Freight charges related to this transaction of $150 were paid by Franks Company.

Brads Company returned, to Franks Company, $250 of this merchandise on May 3, 2016. Merchandise was sold for $400.

How would you prepare a general journal entry for Franks company for May 2 and May 3?

2nd question

Merchandise was returned to a supplier.The goods were previously purchased on account.The goods had not been paid for and there were no discounts.Assuming a periodic system, what journal entry is needed by the purchaser to record the return?

Debit Accounts Payable, and Credit Purchase Discounts.

Debit Accounts Payable, and Credit Purchase Returns and Allowances.

Debit Accounts Payable, and Credit Inventory.

Debit Accounts Payable, and Credit Purchases.