Using T accounts for Cash, Accounts Payable, Purchases, Purchases Returns and Allowances, Purchases Discounts, and Freight-In, enter the following purchase transactions. Identify each transaction with its corresponding letter. Use a new set of T accounts for each set of transactions, 1–4.

1. Purchase of merchandise with cash.

(a) Merchandise is purchased for cash, $2,300.

(b) Merchandise listed at $4,000, less a trade discount of 10%, is purchased for cash.

2. Purchase of merchandise on account with credit terms.

(a) Merchandise is purchased on account, credit terms 2/10, n/30, $4,000.

(b) Merchandise is purchased on account, credit terms 3/10, n/30, $2,800.

(c) Payment is made on invoice (a) within the discount period.

(d) Payment is made on invoice (b) too late to receive the cash discount.

3. Purchase of merchandise on account with return of merchandise.

(a) Merchandise is purchased on account, credit terms 2/10, n/30, $5,600.

(b) Merchandise is returned for credit before payment is made, $600.

(c) Payment is made within the discount period.

4. Purchase of merchandise with freight-in.

(a) Merchandise is purchased on account, $3,800 plus freight charges of $200. Terms of the sale were FOB shipping point.

(b) Payment is made for the cost of merchandise and the freight charge.