Answer:
The journal entries are as follows:
(1) (i) On October 10, 2018
Merchandise inventory A/c (3,500 × $17) Dr. $59,500
To Accounts payable (Piranha) $59,500
(To record the purchase of books)
(ii) On October 13, 2018
Accounts payable A/c (100 × $17) Dr. $1,700
To merchandise inventory $1,700
(To record the purchase return of book)
(2) (i) On October 10, 2018
Accounts receivable A/c Dr. $59,500
To sales
(To record the sales of book)
Cost of goods sold A/c Dr. $35,700
To merchandise inventory $35,700
(To record the cost of goods sold of book)
(ii) On October 13, 2018
Sales return and allowances A/c Dr. $1,700
To accounts receivable $1,700
(To record the sales return of book)
Merchandise inventory A/c Dr. $1,020
To cost of goods sold $1,020
(To record the cost of good return)
