Prepare journal entries to record each of the following purchases transactions of a merchandising company. Show supporting calculations and assume a perpetual inventory system.
Mar. 5
Purchased 500 units of product with a list price of $5 per unit. The purchaser is granted a
trade discount of 20%; terms of the sale are 2?10, n?60; invoice is dated March 5.
Mar. 7
Returned 50 defective units from the March 5 purchase and received full credit.
Mar. 15
Paid the amount due from the March 5 purchase, less the return on March 7.