Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4.600 price. invoicedated April 2. credit terms of 2/15, N60. and F08 shipping point.3 Paid $300 for shipping charges on the April 2 purchase.4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $600.17 Sent 3 check to Lyon Company for the April 2 purchase, net of the discount and the returnedmerchandise.18 Purchased merchandise from Frist Corp. under the following terms: $8.500 price. invoice datedApril 18, credit terms of 2110, n/30, and F08 destination.21 Alter negotiations, received from Fn'st a $1,100 allowance on the April 18 purchase.28 Sent check to Frist paying for the April 18 purchase, net of the discount and allowance. Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventorysystem.

Lyon Purchase journal entries

merchadise         4600  debit

accounts payable  4600 credit

merchandise         300  debit

cash                 300  credit

account payable600debit

merchandise         600credit

accounts payable4000debit

merchandise            80credit

Cash                3920 credit

First Purchase journal entries

merchadise         8500debit

accounts payable  8500 credit

accounts payable1100debit

merchandise          1100

accounts payable  7400debit

merchandise            148 credit

Cash                 7252 credit

Explanation:

Lyon company:

the freight are a cost necessary to acquire the merchandise thus, it is considered merchandise

the return decrease our payable and merchandise amount

net balance: 4,600 - 600 = 4,000

discount 4,000  x 2% = 80

cash outlay 4,000 - 80 = 3,920

First Company:

the allowance decrease both, the amount due and the merchandise value

The net amount is:

8,500 - 1,100 = 7,400

discount 7,400 x 2% = 148

cash outlay: 7,400 - 148 = 7,252

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