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    The following transaction would be journalized in the books of Company #1 and Company #2

    "Bogus company" engaged in the following transactions during July:

    July 2nd purchased inventory for cash $800

    July 5th purchased store supplies on credit terms of net eom,$600

    July 8th purchased inventory of $3,000, plus freight charges of $230. Credit terms are 3/15n/ 30 ( 3% discount if paid in 15 days or full payment if paid 30 days)

    July 9th sold goods for cash $1,200. "Bogus company's" cost of these goods was $700

    July 11th returned $200 of the inventory purchased on July 8th. It was damaged.

    July 12th purchased inventory on credit of 3 / 10n / 30 ,$3,330.

    July 14th sold inventory on credit terms of 2 /10n / 30, $9,600 (COST $5,000).

    July 16th paid utilities expense, $275.

    July 20th received returned inventory from July 14 sale, $400. "Bogus company" shipped the wrong goods by mistake. "Bogus company's" cost of the inventory received wa $250

    July 21st borrowed the amount owed on the July 8th purchase. Signed a note payable to the bank for $2,946, which takes into account the return of inventory on July 11th

    July 21st paid supplier for goods purchased on July 8th less the return and the discount.

    July 23rd received $6,860 cash in partial settlement of his account from the customer who purchased inventory on July 14th. Granted the customer a 2% discount and credited his account receivable for $7,000.

    July 30th paid for the store supplies purchased on July 5th.

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    Solution Preview

    The following transaction would be journalized in the books of Company #1 and Company #2

    Bogus Company is Company #1, I will put the transaction in black. For Company #2, I will put it in blue.

    Please note that I will consider only Bogus Company and its supplier. Therefore, there will be journal transactions for two companies only when Bogus Company has transactions with its supplier.

    "Bogus company" engaged in the following transactions during July:

    July 2nd purchased inventory for cash $800

    Inventory 800
    Cash 800

    Cash 800
    Sales 800

    July 5th purchased store supplies on credit terms of net eom,$600

    Store supplies 600
    Accounts Payable 600

    July 8th purchased inventory of $3,000, plus freight charges of $230. Credit terms are 3/15n/ 30 (3% ...

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