Purchase-Related Transactions

Journalize entries for the following related transactions of Manville Heating & Air Company:

a. Purchased $32,000 of merchandise from Wright Co. on account, terms 2/10, n/30.

	Merchandise Inventory
	Accounts Payable-Wright Co.

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a. A purchase increases inventory and the amount that is owed on account.

b. Paid the amount owed on the invoice within the discount period.

	Accounts Payable-Wright Co.
	Cash

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b. A payment of the invoice within the discount period reduces Accounts Payable for the amount of the invoice, reduces Cash for the amount of the invoice less the discount, and records the discount as a reduction in Merchandise Inventory.

c. Discovered that $6,400 of the merchandise purchased in (a) was defective and returned items, receiving credit.

	Accounts Payable-Wright Co.
	Merchandise Inventory

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c. This transaction reduces Merchandise Inventory and the Accounts Payable. Since this return was made after payment was made at the discounted price, the credit will be for the cost of returned goods less the discount.

d. Purchased $5,000 of merchandise from Wright Co. on account, terms n/30.

	Merchandise Inventory
	Accounts Payable-Wright Co.

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d. A purchase increases Merchandise Inventory and Accounts Payable.

e. Received a refund from Wright Co. for return in (c) less the purchase in (d).

	Cash
	Accounts Payable-Wright Co.