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    Journal Entries

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    Prepare the necessary general journal entries for the month of September for the Derby Company for each situation given below. Derby uses a perpetual inventory system.

    Oct. 5 Paid cash of $14,000 for operating expenses that were incurred and properly recorded in the previous period.

    8 Purchased merchandise for $16,000 on account September 1. Credit terms: 2/10, n/30.

    10 Paid freight bill of $335 for merchandise purchased on September 8.

    15 Paid for merchandise purchased on September 9. The company takes all discounts to which it is entitled.

    20 Sold merchandise for $13,000 to Myna Wina on account on September 12. The cost of the merchandise sold was $7,800. Credit terms: 2/10, n/30.

    25 Issued a credit memo to Myna Wina for $800 for merchandise returned by him from the sale on September 20. The cost of the merchandise returned was $480.

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    Solution Summary

    The solution explains how to prepare the journal entries under the perpetual inventory system