Cash Accounts Payable
(2) 300 (3) 4,000 (1) 21,000
(4) 16,830 (4) 17,000
Merchandise Inventory
(1) 21,000 (3) 4,000
(2) 300 (4) 170
Answer:
(1) Purchased merchandise on account at a cost of $21,000.
(2) Paid freight, $300.
(3) An allowance or return of merchandise was granted by the creditor, $4,000.
(4) Paid the balance due within the discount period: debited Accounts Payable, $17,000, and credited Merchandise Inventory for the amount of the discount, $170, and Cash, $16,830.