Question: Presented below is information related to Chile Co. 1. On April 5, purchased merchandise from Graham Company for $16,000, terms 2/10, net/30, FOB shipping point.

Presented below is information related to Chile Co.
1. On April 5, purchased merchandise from Graham Company for $16,000, terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $800 on merchandise purchased from Graham.
3. On April 7, purchased equipment on account from Reed Mfg. Co. for $27,000.
4. On April 8, returned merchandise, which cost $4,000, to Graham Company.
5. On April 15, paid the amount due to Graham Company in full.

Instructions
(a) Prepare the journal entries to record these transactions on the books of Chile Co. using a periodic inventory system.
(b) Assume that Chile Co. paid the balance due to Graham Company on May 4 instead of April 15. Prepare the journal entry to record this payment.

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