Purchase-Related Transactions

Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $30,500, terms n/30. Thecost of the merchandise soldis $18,300. Showcase Co. issues acredit memofor $5,500 as a price adjustment prior to Balboa Co. paying the original invoice.

a.Journalize Balboa Co.'s entry for the purchase. If an amount box does not require an entry, leave it blank.

Merchandise Inventory

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Accounts Payable-Showcase Co.

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Feedback

a. Record the transaction from the buyer's perspective. A purchase increases inventory and the amount that is owed on account.

b.Journalize Balboa Co.'s entry for the credit memo. If an amount box does not require an entry, leave it blank.

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