Recording Purchase Transactions

Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April.

On April 1, Jeet Company purchased merchandise on account from Reece Company with credit terms of 2/10, n/30. The selling price of the merchandise was $4,200, and the cost of the merchandise sold was $2,450.

On April 1, Jeet paid freight charges of $100 cash to have the goods delivered to its warehouse.

On April 8, Jeet returned $1,000 of the merchandise which had originally cost Reece $700.

On April 10, Jeet paid Reece the balance due.

Cornerstone Exercise 6-18 (Algorithmic) Recording Purchase Transactions Jeet Company and Reece Company use the perpetual inventory system. The following transactions occurred during the month of April. a. On April 1, Jeet Company purchased merchandise on account from Reece Company with credit terms of 2/10, n/30. The selling price of the merchandise was $4,200, and the cost of the merchandise sold was $2,450. b. On April 1, Jeet paid freight charges of $100 cash to have the goods delivered to its warehouse. c. On April 8, Jeet returned $1,000 of the merchandise which had originally cost Reece $700. d. On April 10, Jeet paid Reece the balance due. Required: 1. Prepare the journal entries to record the April 1 purchase (ignore any freight charges) of merchandise by Jeet Company. April 1 (Purchased inventory on account) Prepare the journal entry to record the payment of freight on April 1. April 1 (Recorded the payment of freight charges) 2. Prepare the journal entry to record the April 8 return of merchandise by Jeet. April 8 (Returned merchandise) 3. Prepare the journal entry to record the April 10 payment to Reece Company by Jeet. For those boxes in which no entry is required, leave the box blank April 10 (Paid accounts payable within discount period)