Answer:
(1) the purchase of merchandise.
Merchandise $174,000 (debit)
Accounts Payable : Bailey Office Suppliers $174,000 (credit)
(2) the return of merchandise.
Accounts Payable : Bailey Office Suppliers $14,000 (debit)
Merchandise $14,000 (credit)
(3) the payment on account.
Accounts Payable : Bailey Office Suppliers $160,000 (debit)
Discount received $3,200 (credit)
Cash $156,800 (credit)
Explanation:
Perpetual inventory system, keeps record of the cost of sales and inventory valuation after every sale.
On Purchase : Increase the assets of merchandise and increase the Liability.
On Return : Decrease the Assets of Merchandise and Decrease the Liability.
On Payment : Decrease the Assets of of Cash and decrease the Liability.
