Information related to Harwick Co. is presented below.

1. On April 5, purchased merchandise from Botham Company for $38,700, terms 3/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $830 on merchandise purchased from Botham.
3. On April 7, purchased equipment on account for $28,900.
4. On April 8, returned damaged merchandise to Botham Company and was granted a $5,400 credit for returned merchandise
5. On April 15, paid the amount due to Botham Company in full.
Prepare the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system.

Explanation:

The information are shown in journal form below:

On April 5;

Dr Merchandise Inventory A/c $38,700

            Credit Accounts payable A/c $38,700

(Being merchandise purchased on credit)

On April 6;

Dr Merchandise inventory A/c $830

           Cr Cash A/c $830

(Being freight paid by cash)

On April 7;

Dr Equipment A/c $28,900

          Credit Accounts payable A/c $28,900

(Being equipment purchased on credit)

On April 8;

Dr Accounts payable A/c $5,400

    Credit Merchandise Inventory A/c $5,400

(For goods returned)

On April 15;

Dr Accounts payable A/c $33,300 ($38,700  - $5,400)

    Cr Cash A/c   $32,301                   

    Cr Merchandise Inventory A/c $999 ($33,300 × 3%)

(Being due amount is paid)

answercompetitive advantage;

consumer credit. an advantage is that it allows consumers to afford expensive goods and services now, increasing their standard of living. however, a disadvantage is that it creates a trap for debt, if people do not have self control, they may see themselves filing personal bankruptcy.