A seller uses a perpetual inventory system, and on April 18, a customer discovers that merchandise previously purchased is defective The buyer decides to keep the defective merchandise and the seller allows a $15 price reduction, paid in cash to the buye Complete the journal entry to record the allowance granted to the buyer by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns

Question

Business

Elaine Burton

24 May, 11:09

A seller uses a perpetual inventory system, and on April 18, a customer discovers that merchandise previously purchased is defective The buyer decides to keep the defective merchandise and the seller allows a $15 price reduction, paid in cash to the buye Complete the journal entry to record the allowance granted to the buyer by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns

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Demetrius Mercado · Answer 1

accounts payable 15 debit

merchandise inventory 15 credit

Explanation:

the price deduction will reduce the amount due to the supplier. Also this will represent the decrease in the value of the merchandise so the merchandise inventory account should decrease in the magnitude.

The account payable is a liability to make it decrease we post on debit

while, the merchandise is an asset therefore it should be credited.