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Information related to Novak Corp. is presented below.
1. On April 5, purchased merchandise on account from Sarasota Company for $28,700, terms 3/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $600 on merchandise purchased from Sarasota.
3. On April 7, purchased equipment on account for $29,700.
4. On April 8, returned $3,400 of merchandise to Sarasota Company.
5. On April 15, paid the amount due to Sarasota Company in full.
Prepare the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.)
Date Account Titles and Explanation Debit Credit

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Answer:

April 5

Debit Inventory $28,700

Credit Accounts Payable $28,700

April 6

Debit Inventory $600

Credit Cash $600

April 7

Debit Equipment $29,700

Credit Accounts Payable $30,000

April 8

Debit Accounts Payable $3,400

Credit Inventory $3,400

April 15

Debit Accounts Payable $25,300

Credit Cash $24,541

Credit Inventory $759

Explanation:

Preparation of the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system

April 5

Debit Inventory $28,700

Credit Accounts Payable $28,700

April 6

Debit Inventory $600

Credit Cash $600

April 7

Debit Equipment $29,700

Credit Accounts Payable $30,000

April 8

Debit Accounts Payable $3,400

Credit Inventory $3,400

April 15

Debit Accounts Payable $25,300 ($28,700-$3,400)

Credit Cash $24,541

($25,300 x 97%)

Credit Inventory $759

($25,300 x 3%)

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