Prepare journal entries to record the following transactions for a retail store. Assume a perpetual inventory system. April 2nd- Purchased Merchandise from Lyon Company under the following terms: $4,600 price, invoice dated April 2, credit terms of 2/15, n/60, and FOB shipping point.

April 3rd- Paid $300 for shipping charges on the April 2nd purchase.

April 4th- Returned to Lyon Company unacceptable merhcandise that had an invoice price of $600.

April 17th- Sent a check to Lyon Company for the April 2nd purchase, net of the discount and the returned merchandise.

April 18th- Purchased merchandise from Frist Corp. under the following terms: $8500 price, invoice dated April 18, credit terms of 2/10, n/30 and FOB destination.

April 21st- After negotiations, recieved from Frist a $1,100 allowance on April 18th purchase.

April 28th- Sent check to Frist paying for the April 18th purchase, net of discount and allowance.

April 02

Dr Merchandise inventory4,600

Cr Accounts payable—Lyon 4,600

April 03

Dr Merchandise inventory300

Cr Cash300

April 04

Dr Accounts payable—Lyon600

Cr Merchandise inventory600

April 17

Dr Accounts payable—Lyon 4,000

Cr Merchandise inventory80

Cr Cash3,920

April 18

Merchandise inventory8,500

Accounts payable—Frist8,500

April 21

Dr Accounts payable—Frist 1,100

Cr Merchandise inventory 1,100

April 28

Dr Accounts payable—Frist7,400

Cr Merchandise inventory 148

Cr Cash 7,252

Explanation:

Preparation of the journal entries

April 02

Dr Merchandise inventory4,600

Cr Accounts payable—Lyon 4,600

April 03

Dr Merchandise inventory300

Cr Cash300

April 04

Dr Accounts payable—Lyon600

Cr Merchandise inventory600

April 17

Dr Accounts payable—Lyon 4,000

Cr Merchandise inventory80

[($4,600 − $600) × 2%]

Cr Cash3,920

(4,000-80)

April 18

Merchandise inventory8,500

Accounts payable—Frist8,500

April 21

Dr Accounts payable—Frist 1,100

Cr Merchandise inventory 1,100

April 28

Dr Accounts payable—Frist7,400

Cr Merchandise inventory 148

(2%*7400)

Cr Cash 7,252

(7,400-148)

answer; normative economics;