00:01
In order to record the general journal entries for a merchandising company, we must know the format of the general journal.
00:13
The format consists of various columns.
00:16
First column includes the heading date, thereafter the account title and its description.
00:27
The next column belongs to the debit side, thereafter the column is of credit and thereafter the last column belongs to the reference.
00:53
After knowing the format, we should skip to the next part which is the solution for the question.
01:03
So, the first transaction is asking to record the purchase of merchandise from craft company on credit.
01:23
In this case, the account that is debited is purchases, that means purchases should be debited for 10600 and the account payable should be credited and the amount will remain same 10600.
01:57
Now moving on to the second transaction that is for may 3 which meant to record the sale of merchandise to sting company on credit.
02:16
In this particular question, the account receivables must be debited with an amount of 3000 and sales should be credited with an amount of 3000.
02:42
Thereafter moving on to the transaction occurred on may 4 which meant to record the return of part of merchandise purchased from craft company on may 1.
02:55
In this transaction, the account payable should be debited with an amount of 800 and purchase return and allowances should be credited with the same amount.
03:27
Now moving on to the transaction which occurred on may 6.
03:37
This transaction meant to record the payment to bow company within the discount period for the merchandise purchased on may 1.
03:56
In this particular part, account payable should be debited by reducing the actual amount with the amount of discount which comes 10392 and crediting the cash account with the same amount.
04:36
Now wondering how this payment came into existence.
04:42
So the working note is here.
04:44
The amount was 10600 and the amount of discount was 208.
04:54
After reducing the amount of 10600 by 208 we get the amount 10392...
