Answer and Explanation:
The Journal entries are shown below:-
1. Merchandise Inventory Dr, $32,000
To Accounts payable $32,000
(Being purchase of inventory is recorded)
Here we debited the merchandise inventory as it increased the assets and we credited the accounts payable as it also increased the liabilities
2. Merchandise Inventory Dr, $315
To Cash $315
(Being cash paid is recorded)
Here we debited the merchandise inventory as it increased the assets and we credited the cash as it decreased the assets
3. Accounts payable Dr, $1,100
To Merchandise Inventory $1,100
(Being returned inventory is recorded)
Here we debited the accounts payable as it decreased the liabilities and we credited the merchandise Inventory as it also decreased the assets
4. Accounts payable Dr, $30,900
To Merchandise Inventory $927 ($32,000 - $1,100) × 3%
To Cash $29,973 ($32,000 - $1,100) × 97%
(Being cash paid is recorded)
Here we debited the accounts payable as it decreased the liabilities and we credited the merchandise Inventory and cash as this both items are decreased in assets
