Question

Prepare the journal entries to record these transactions on blossom company's books using a periodic inventory system. (if no entry is required, select "no entry" for the account titles and enter 0 for the amounts. credit account titles are automatically indented when amount is entered. do not indent manually. record journal entries in the order presented in the problem.) (a) on march 2, blossom company purchased $860,500 of merchandise from sunland company, terms 2/10, n/30. (b) on march 6, blossom company returned $111,600 of the merchandise purchased on march 2. (c) on march 12, blossom company paid the balance due to sunland company. no. date account titles and explanation debit credit (a) (b) (c)

Answer 1

Since the company is following a periodic inventory system, it has to use temporary accounts to record sales and purchases.

Transaction A

Purchases – Dr 860500

Accounts payable 860500

Transaction B

Accounts payable - Dr $111,600

Purchase returns $111,600

Transaction C

Accounts payable - Dr 748900

Discount received 14,978

Cash 733,922