Journalize entries for the following related transactions of Lilly Heating & Air Company using the net method under a perpetual inventory system. Refer to the Chart of Accounts for exact wording of account titles.

A. Purchased $54,200 of merchandise from Schell Co. on account, terms 1/10, n/30. B. Paid the amount owed on the invoice. C. Discovered that merchandise with an invoice amount of $7,000 purchased in (a) was defective and returned items, receiving credit. D. Purchased $6,000 of merchandise from Schell Co. on account, terms n/30. E. Received a refund from Schell Co. for return in (C) less the purchase in (D).

CHART OF ACCOUNTS

Lilly Heating & Air Company General Ledger

ASSETS 110 Cash 120 Accounts Receivable 125 Notes Receivable 130 Inventory 140 Office Supplies 141 Store Supplies 142 Prepaid Insurance 180 Land 192 Store Equipment 193 Accumulated Depreciation-Store Equipment 194 Office Equipment 195 Accumulated Depreciation-Office Equipment

LIABILITIES 211 Accounts Payable-Schell Co. 218 Sales Tax Payable 219 Customer Refunds Payable 220 Unearned Rent 221 Notes Payable

EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends

REVENUE 410 Sales 610 Rent Revenue

EXPENSES 501 Cost of Goods Sold 521 Delivery Expense 522 Advertising Expense 524 Depreciation Expense-Store Equipment 525 Depreciation Expense-Office Equipment 531 Rent Expense 533 Insurance Expense 534 Store Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 539 Miscellaneous Expense 710 Interest Expense.

Journalize entries for the transactions of Lilly Heating & Air Company. Refer to the Chart of Accounts for exact wording of account titles. For grading purposes use December 31 as the date for all transactions.