Aplication) 2 Purchase-Related Transactions Journalize entries for the following related transactions of Lilly Heating & Air Company who uses the net method under a perpetual inventory system. (If an amount box does not require an entry, leave it blank.) a. Purchased $36,000 of merchandise from Schell Co. on account, terms 1/10, n/30 Inventory Accounts Payable-Schell Co. Feedback Check My Work a. A purchase increases inventory and the amount that is owed on account. b. Paid the amount owed on the invoice. Accounts Payable-Schell Co. Cash Feedback Check My Work b. A payment of the invoice within the discount period reduces Accounts Payable and Cash for the amount of the invoice less the discount. c. Discovered that merchandise with an invoice amount of $9,000 purchased in (a) was defective and returned items, receiving credit. Accounts Payable-Schell Co. Inventory Check My Work Previous Next >