E5: Chapter 5 Accounting for Merchandising Operations (10 Points)

On October 1, Brad Company purchases $1,000 of merchandise from Paisley Company with terms of 3/10, n/30. The journal entry has been recorded and posted to the relevant General Ledger accounts.

Brad will pay for the merchandise on October 10. Prepare the journal entry to record the payment. Post to the relevant General Ledger accounts. Remember to use the Date and PR columns in both the Journal and the Ledger.

General Journal

				Page 4
Date	Account Titles and Explanation	PR	Debit	Credit
2015
10/01	Merchandise Inventory	130	1,000
	Accounts Payable	200		1,000

Partial General Ledger

			Cash	ACCT	100
Date
2015	Explanation	PR	Debit	Credit	Balance
10/10	Balance				5,000

			Merchandise Inventory	ACCT	130
Date
2015	Explanation	PR	Debit	Credit	Balance
10/01		G4	1,000		1,000

			Accounts Payable	ACCT	200
Date
2015	Explanation	PR	Debit	Credit	Balance
10/01		G4		1,000	1,000