Answer:
Purchase  12000 debit
 Accounts Payable  12000 credit
--to record purchase--    
Accounts Payable   1200 debit
 Returns&Allowance       1200 credit
--to record returned goods--
Purchase  16000 debit
 Accounts Payable  16000 credit
--to record purchase--    
Purchase          20000 debit
 Accounts Payable  20000 credit
--to record purchase--  	
Account Payable    16,000 debit
      Purchase Discount      160 credit
      Cash                        15,840 credit
-to record payment within--
SECOND METHOD:
Purchase  11,760 debit
 Accounts Payable  11,760 credit
--to record purchase--    
Accounts Payable   1,176 debit
 Returns&Allowance       1,176 credit
--to record returned goods--
Purchase  15,840 debit
 Accounts Payable  15,840 credit
--to record purchase--    
Purchase          19,600 debit
 Accounts Payable  19,600 credit
--to record purchase--  	
Account Payable    16,000 debit
      Cash                        15,840 credit
-to record payment within--
interst expense      216 debit
   account payable         216 credit
--to record interest incurred--
Explanation:
As we use periodic system we calculate the inventory and COGS at the end of the period so we use purchase and returns accounts rather than adjusting inventories in every transactions.
In the second method we use itnerest expense when the discount is loss.
<u><em>interest incurred for the period:</em></u>
(12,000 - 1,200) x 2% = 216
The secodn purchase at the end of the monthcan be paid within discount period therefore, we do not recognize interest expense yet.