Response to the following problem:
Sherman Stores Ltd. had the following transactions:
Oct. 8 Purchased $2,800 of merchandize on account from Morris Wholesalers Corp. for terms 1/10, net 30
12 Received a credit memo from Morris Wholesalers Corp. for $800 of defective merchandize included in the October 8 purchase and subsequently returned to Morris.
Additional Information: Morris Wholesalers Corp. uses the periodic inventory system.
Required:
1. Prepare journal entries in the records of Sherman, assuming that it paid the amount due on
a. October 8
b. October 25.
2. Prepare journal entries in the records of Morris Wholesalers Corp., assuming that it received payment on
a. October 18
b. October 25.
Omit general ledger account numbers and descriptions from the journal entries.