On June 10, Diaz Company purchased $8,000 of merchandise on account from Taylor Company, FOB shipping...

 

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On June 10, Diaz Company purchased $8,000 of merchandise on account from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz paid the freight costs of $400 on June 11. Goods totaling $300 were returned to Taylor for credit on June 12. On June 19, Diaz paid Taylor Company in full, less the discount. Both companies use a perpetual inventory system and the earnings approach for revenue recognition. Instructions: Prepare journal entries for each transaction on the books of Diaz Company. Date Account Titles Debit Credit On June 10, Diaz Company purchased $8,000 of merchandise on account from Taylor Company, FOB shipping point, terms 2/10, n/30. Diaz paid the freight costs of $400 on June 11. Goods totaling $300 were returned to Taylor for credit on June 12. On June 19, Diaz paid Taylor Company in full, less the discount. Both companies use a perpetual inventory system and the earnings approach for revenue recognition. Instructions: Prepare journal entries for each transaction on the books of Diaz Company. Date Account Titles Debit Credit

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