Purchase-Related Transactions Warwicks Co., a women's clothing store, purchased $26,000 of merchandise from a supplier on account, terms FOB destination, 1/10, n/30. Warwicks returned $3,900 of the merchandise, receiving a credit memo, and then paid the amount due within the discount period. a. Journalize Warwicks Co.'s entry to record the purchase. Merchandise Inventory 26,000 Accounts Payable 26,000 Feedback a. A purchase increases Merchandise Inventory and Accounts Payable. b. Journalize Warwicks Co.'s entry to record the merchandise return. Accounts Payable 3,900 Merchandise Inventory 3,900 Feedback b. A return reduces Merchandise Inventory and Accounts Payable in the purchaser's records. c. Journalize Warwicks Co.'s entry to record the payment.

Purchase-Related Transactions

Warwicks Co., a women's clothing store, purchased $26,000 of merchandise from a supplier on account, terms FOB destination, 1/10, n/30. Warwicks returned $3,900 of the merchandise, receiving a credit memo, and then paid the amount due within the discount period.

a. Journalize Warwicks Co.'s entry to record the purchase.

	Merchandise Inventory
	Accounts Payable

Feedback

a. A purchase increases Merchandise Inventory and Accounts Payable.

b. Journalize Warwicks Co.'s entry to record the merchandise return.

	Accounts Payable
	Merchandise Inventory

Feedback

b. A return reduces Merchandise Inventory and Accounts Payable in the purchaser's records.

c. Journalize Warwicks Co.'s entry to record the payment.

	Accounts Payable
	Cash